- The Teachers Insurance and Annuity Association of America (TIAA) is selling its banking arm to a group of investment funds as part of a shift to focus on its retirement and asset management businesses, the Jacksonville, Florida-based retirement provider and investment firm announced on Thursday.
- TIAA will retain a non-controlling ownership stake in the $38.6 billion-asset bank, the company said. The firms did not disclose financial terms of the deal.
- TIAA said it will apply for a new national trust bank charter following the transaction, which is expected to close in 2023.
“As we refocus on retirement, we have decided now is the appropriate time for TIAA Bank to begin a new chapter under new ownership,” David Nason, TIAA’s chief operating officer said in a statement. “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 incredible TIAA Bank associate team. TIAA is making this move from a position of strength, and we are confident the bank is well-positioned for future growth and success.”
Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management will each own non-controlling interests in the bank after the transaction closes, TIAA said.
The group of investors will acquire TIAA Bank’s current assets and business lines, with the exception of TIAA Trust, which TIAA said complements its retirement organization and mission.
TIAA Trust will become a subsidiary of TIAA, the company said.
The retirement giant plans to continue its ongoing business relationships with TIAA Bank, which will operate under a new brand, and remain headquartered in Jacksonville.
TIAA, which has $1.2 trillion in assets under management, offers investing, banking, advice and education and retirement services.
The firm tapped Thasunda Brown Duckett, a former consumer banking chief at JPMorgan Chase, as its CEO last year, replacing Roger Ferguson, who retired.