SunTrust and BB&T (both ILS trust providers) merge to form Truist

There is a new reinsurance and insurance-linked securities (ILS) collateral trust provider in town, after Truist Financial Corporation was formed after a merger of equals between SunTrust and BB&T.

Both SunTrust Bank and BB&T are large banking groups with operations across personal and commercial customers.

The pair both had specialist areas that could deliver on trust banking for reinsurance collateral and now they come together under a new brand of Truist.

SunTrust had the more active collateralised reinsurance and ILS trust operation (as well as custodian, escrow and other services), with a team that is well-known and visible in the sector.

BB&T’s team has always seemed less visible in the space, but reinsurance and ILS collateral trusts were a part of its corporate offering of relevance to the ILS market, alongside acting as indenture trustees, custodians, paying and transfer agents.

Collateral trusts are a key part of the insurance-linked securities (ILS) market’s financial structure, used across transactions from catastrophe bonds to collateralised reinsurance where capital needs to be held by a third-party custodian.

Truist, formed out of the merger of equals between BB&T Corporation and SunTrust Banks, Inc., now becomes the sixth largest U.S. commercial bank, with over 10 million households as customers and a full roster of business clients.

“This is a historic moment for Truist – a financial services organization created from two companies with shared values and a deep commitment to building a better future for our clients and communities,” explained Truist Chairman and Chief Executive Officer Kelly S. King. “The completion of this merger of equals is a tremendous achievement and a testament to the thousands of Truist teammates who have diligently worked to ensure its timely conclusion.”

“With Truist, we’re creating a new company with a bold, transformative vision to increase investment in innovative technology and create a distinctive teammate and client experience,” added Truist President and Chief Operating Officer Bill Rogers. “We have much work ahead of us, but we’re well-positioned to create meaningful change for the clients we serve and the communities where we live and work.”

Clients are likely to continue to be serviced by the respective companies they took out services with, but overtime there will be a merger towards shared systems and brand, bringing together the depth of service provision across the pair.

In the insurance-linked securities (ILS) space the provision of banking collateral trusts, indenture offerings and other services are hotly contested, with some major players dominating the space.

But this merger could position Truist to capitalise on its now enlarged footprint and service offering, helping it to win more reinsurance and ILS collateral trust business and related service provision over time.