TIAA agrees to sell its banking arm to suite of investors
Retirement and investment solutions provider TIAA is set to sell its banking arm, TIAA Bank, to a suite of investors for an undisclosed sum.
The firm says the move will allow it to “refocus” on its retirement business, with the bank to be sold to investors with “extensive experience” in financial services.
The new investors, which will each own non-controlling interests in the bank, are funds managed by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management.
The companies will acquire nearly all of the bank’s current assets and business lines with the exception of TIAA Trust, which currently is part of TIAA Bank but is closely aligned with the wealth business which TIAA says “complements” its retirement operations.
TIAA will apply for a new, separate national trust bank charter, and the TIAA Trust business will become a subsidiary of TIAA.
TIAA Bank’s headquarters will remain in Jacksonville, Florida with the bank set to operate under a new name, which will be announced when the transaction closes in 2023, subject to customary closing conditions.
TIAA originally reached a deal to buy EverBank for $2.5 billion in 2016 before rebranding the firm under the TIAA Bank name in 2018.
Once the transaction is finalised, TIAA and its asset manager Nuveen will continue to have a business relationship with the bank. Proceeds from the sale will go to TIAA’s General Account, which the company manages for the benefit of its retirement clients.
TIAA chief operating officer David Nason says: “The changes we’re announcing are in the best interest of TIAA and our retirement clients, and for our bank’s consumer and commercial clients and the TIAA Bank associate team.”