Principal Shifts $390 Million Loan Portfolio as Bank RetreatsZachary Tracer
Principal Financial Group Inc. 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., American International Group Inc. 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.