NU Online News Service, May 12, 2004, 6:03 p.m. EDT – Principal Financial Group Inc., Des Moines, Iowa, has agreed to sell its 68-year-old mortgage banking unit to Citigroup Inc., New York, for $1.3 billion.[@@]
Principal will get $290 million more than the net book value of the Principal Residential Mortgage Inc. unit, and the deal will include the transfer of $970 million in liabilities, Principal says.
Principal’s board already has approved the deal. The company hopes to get the regulatory approvals it needs to complete the deal by Sept. 30.
Principal Residential reported $29 million in net income for the first quarter on $256 million in revenue. It ended 2003 with 958,000 loans on its books and a total loan principal balance of $119 billion.
Most of the loans are conventional fixed-rate prime mortgages, Citigroup says.