Bloomberg News

Principal Shifts $390 Million Loan Portfolio as Bank Retreats

October 09, 2013

Principal Financial Group Inc. (PFG:US) shifted $390 million in loans from its bank unit as U.S. regulators increase oversight.

Principal moved $350 million of commercial real estate debt to another part of the Des Moines, Iowa-based company, Sonja Sorrel, a spokeswoman, said in an e-mail today. About $40 million in loans were sold to external buyers, she said.

Principal, which offers investment products and life insurance, is seeking to deregister as a savings and loan holding company amid greater U.S. scrutiny of such firms under the Dodd-Frank Act. Insurers including MetLife Inc. (MET:US), American International Group Inc. (AIG:US) and Allstate Corp. have sold deposits or retreated from banking.

“Principal Bank remains on track to complete deregistration by year-end,” Sorrel said. “As part of this process, Principal Bank recently divested the bank’s commercial and commercial real estate loans.”

Principal said in June it reached a deal to sell $200 million of deposits from the bank unit. The loan sales were in August and September, Sorrel said.

The insurer has said its bank will operate as a limited purpose trust institution after the sales are completed. The unit will continue offering individual retirement accounts.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story:


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Companies Mentioned

  • PFG
    (Principal Financial Group Inc)
    • $50.63 USD
    • 1.46
    • 2.88%
  • MET
    (MetLife Inc)
    • $50.46 USD
    • 1.31
    • 2.6%
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