Truist could unlock value with sale of TIH, says Citi

Citi says Truist Financial shares now trade at the largest discount to the group following the recent underperformance. Higher rates have magnified the bank’s missteps in its securities portfolio, the analyst tells investors in a research note. The firm says monetizing Truist’s majority stake in its insurance business TIH could “change the narrative” and reposition its alternative financial services portfolio. Such a move could be neutral to regulatory capital, add 200 basis points to “pro-forma CET1” and be 15% earnings accretive, while also positioning the balance sheet for higher rates, says Citi. The firm sees a “very attractive” risk/reward at current share levels and reiterates a Buy rating on the name with a $39 price target.