Financial services firm TIAA has announced a definitive agreement to divest its banking unit to new investors for an undisclosed sum.    

The move to sell TIAA Bank is part of the firm’s long-term strategic plan to shift attention to its asset manager Nuveen and retirement business.

Following the transaction, funds managed by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management will own non-controlling interests in the bank’s current assets and business lines.

However, TIAA Trust, a part of the bank, will be out of the divestment deal. 

In this regard, TIAA will apply for a new national trust bank charter to turn TIAA Trust as its subsidiary.

As per the agreement, TIAA will continue to own a non-controlling ownership in the bank. 

Proceeds from the sale will be returned to TIAA’s General Account, benefitting the company’s retirement clients.

The transaction that awaits mandatory clearances is expected to be completed in 2023.

TIAA chief operating officer David Nason said: “As we refocus on retirement, we have decided now is the appropriate time for TIAA Bank to begin a new chapter under new ownership.

“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.”

Once the transaction closes, the bank will be rebranded but will continue to function from its current base in Jacksonville, US. 

Meanwhile, TIAA noted that the shift in ownership will have no impact on its retirement accounts, and that the firm will continue to maintain its business ties with the bank.