BANCANALYSTS ASSOCIATION OF BOSTON'S ANNUAL BANK CONFERENCE - TRUIST FINANCIAL CORP

Explicit Guidance:

• Targeting 15% Return on Tangible Common Equity (ROTC) for the upcoming year (FY2027), with a medium-term target of 16–18% as a characteristic of high-performing peers.
• Maintaining a CET1 operating target of 10% (+/-) to support an elevated capital return program.
• Continuing elevated share buybacks, specifically noting execution in the fourth quarter.
• Expecting investment banking revenue to grow at a "high single-digit to low double-digit" organic rate this year (outperforming the historical organic growth rate).
• Forecasting loan growth guidance of 4–6% for the current cycle.

Business-Segment Outlook:

• Consumer: Shifting focus to a "narrowed strategy" centered on driving core checking (DDA) growth; investing in physical network expansion, ATM fleet improvement, and digital channel integration to fuel the funding engine.
• Wholesale Banking: Accelerating growth by adding "meaningfully more frontline resources" in middle market, commercial, corporate, and investment banking; prioritizing scaling in payments and advisory services.
• Wealth Management: Aiming to grow Assets Under Advice (AUA) via record net flows; targeting deepening client penetration (only 3% of base currently uses investment services; only 30% have loans) by wrapping wealth clients with banking products (securities, mortgages, checking).
• Payments: Progressing through commercialization phases; treasury management products are generating "high single-digit times P/T revenue"; plans to complete product gaps, accelerate embedded product capabilities (tokenized deposits, modernized rails), and expand treasury sales teams.
• Investment Banking: Leveraging strong capital markets capabilities (debt, securitization, project finance); significant emphasis on expanding the underperforming advisory business line; increasing cross-selling of IB services to commercial and middle-market clients.
• Divestitures/Restructuring: Completed divestiture of Regional Acceptance Corp; announced sale of Lightstream; exited marine, vehicle lending, and subprime auto originations to reduce "bad calorie" balance sheet assets and strengthen the funding profile.

Market and Competitive Outlook:

• Demand: Client loan demand described as "pretty steady" despite interest rate volatility; foundation supported by strong GDP growth and consumer spending.
• Competitive Positioning: Belief in a "right to win" by combining regional scale (30,000 clients, 150-year history) with Wall Street-level capabilities; winning against competitors by offering integrated solutions (payments, advisory, wealth) without relaxing risk standards.
• Pricing/Share: Anticipating ability to grow within the 4–6% loan guidance range while maintaining disciplined risk standards; expecting continued improvement in funding mix to enhance profitability.

Macro / Industry Outlook:

• Interest Rates: Acknowledged volatility but views the current environment as supportive of steady loan demand; focusing on improving the securities portfolio yield profile over time.
• Capital Regulation: Planning capital strategies that account for both current rules and the future Basel III endgame; noting potential "day-one benefits" from Basel III to bolster capital ratios.
• Economic Environment: Management expresses confidence in "pretty strong GDP growth" and "strong consumer spending" sustaining client demand.

Strategic Initiatives:

• Capital Allocation: Redirecting capital from divested low-return businesses into high-return growth areas (payments, advisory, wealth, FX/rates originations); enforcing a strict three-question framework (alignment, return, strategic fit) for all capital deployment.
• Expense Rationalization: Conducting a "reset" to inspect every dollar of operating expense; identifying ~1,000 line items to eliminate inefficiencies (tech projects solving yesterday's problems, real estate optimization, process redundancy) to fund the investment agenda.
• Talent Acquisition: Added ~500 bankers to the wholesale franchise over the last two years; plans to add more frontline sales capacity and advisors, particularly in FX, rates, and asset-based lending (ABL); recruiting talent from larger banks to populate new sales forces.
• Product Development: Enhancing treasury management and wealth product capabilities; developing "adjacent capabilities" in asset-based finance and workplace banking solutions.

Risks and Headwinds to Outlook:

• Execution Risk: New talent and expanded sales forces are not at "full productivity" yet; momentum is expected to accelerate as these teams ramp up over the next 6–18 months.
• Funding Constraints: Ensuring the "funding engine" (low-cost deposit generation) keeps pace with asset growth; reliance on liquidity and payment conversations to drive wholesale deposit growth.
• Structural Under-earning: Identification of existing structural under-earning on the balance sheet that requires correction to meet ROTC targets.
• Capital Discipline: Risk of failing to meet return objectives if capital is not strictly allocated to activities aligned with the "most important financial partner" strategy.

Management Tone on the Future:

• Confidence: Expressed "super excited" and "high confidence" in the growth trajectory, describing the company as "completely galvanized" under the new CEO.
• Strategic Shift: Characterizes current actions as a "quick shuffle back" to reduce low-yield assets in order to build a stronger foundation for future growth; explicitly rejecting the notion of "getting smaller" in favor of becoming a "high performing company."
• Urgency: Emphasizes "high degree of focus and urgency" on scaling key areas and notes that "momentum is coming on the back of these investments," signaling a transition from foundation-setting to acceleration.

Miscellaneous:

• New Leadership: CEO Mike Lyons' "ambition is to grow into be a high performing company," driving the strategic reset.
• Integration: Planning to create a "horizontal continuum" linking consumer, small business, commercial, corporate, and wealth services to maximize client lifetime value.
• Balance Sheet: Committed to maintaining a "really strong balance sheet through all cycles," utilizing divestiture proceeds to shorten duration and improve wholesale borrowing flexibility.