Principal to divest loans
The deal with BofI Holding Inc. includes funds from individual checking accounts and certificates of deposit, according to a statement from the Iowa-based Principal. The insurer, which provides life coverage and retirement products, is seeking to deregister as a savings and loan holding company.
Insurers, including MetLife, Hartford Financial Services Group and Allstate, have sold deposits or retreated from banking as regulators increase oversight. Principal said its bank will operate as a limited-purpose trust institution after the sales are complete and will continue offering individual retirement accounts.
"Principal Bank will need to divest of all commercial and commercial real estate loans before Principal Financial Group can formally be deregistered," a spokeswoman for the company, Sonja Sorrel, said. "We are working on those transactions and the regulatory approvals they will require.We are still on track in our efforts to accomplish deregistration by year-end."
Principal Bank had more than $US260 million in commercial real estate loans as of March 31. The bank operates online with no physical branches, as does BofI, the holding company for Bank of Internet.
Frequently Asked Questions about this Article…
Principal Financial Group agreed to sell US$200 million (about US$216 million) of deposits from its savings and loan unit to BofI Holding Inc., including funds from individual checking accounts and certificates of deposit.
BofI Holding Inc., the holding company for Bank of Internet, will acquire the US$200 million of deposits; both Principal Bank and BofI operate online and have no physical branches.
Principal is limiting the insurer's role in banking amid greater U.S. supervision and is seeking to deregister as a savings and loan holding company, so it is selling deposits now and plans to divest commercial loans as part of that effort.
Principal Bank must divest all commercial and commercial real estate loans and obtain necessary regulatory approvals before Principal Financial Group can be formally deregistered, according to company spokeswoman Sonja Sorrel.
Yes. After the deposit sales are complete, Principal Bank will operate as a limited‑purpose trust institution and will continue offering individual retirement accounts (IRAs).
As of March 31, Principal Bank had more than US$260 million in commercial real estate loans on its books.
Yes. Other insurers such as MetLife, Hartford Financial Services Group and Allstate have also sold deposits or retreated from banking as regulators have increased oversight.
Principal said it is working on the transactions and regulatory approvals needed and is still on track to accomplish deregistration by year‑end, while continuing efforts to divest commercial loans.
Call 1300 880 160
Start a chat
Schedule a call
