Principal Financial Group Signs Agreement with Banco do Brasil

Extends joint venture for 23 years

DES MOINES, Iowa, Apr 30, 2010 (BUSINESS WIRE) --Principal Financial Group announced that The Principal(R) and Banco do Brasil have signed a definitive agreement to extend their pension and long-term asset accumulation joint venture in Brazil. Under the terms, the companies' joint venture, BrasilPrev Seguros e PrevidĂȘncia S.A. (BrasilPrev), will have the exclusive right to manufacture and distribute products within the Banco do Brasil network for 23 years.

"We are very pleased to continue our successful partnership which combines Banco do Brasil's significant distribution network with our global pension expertise," said Larry Zimpleman, chairman, president and chief executive officer of The Principal. "Together, over the past 10 years, we've built BrasilPrev into one of Brazil's top retirement services companies with approximately three million accounts and nearly $16 billion in assets under management1. We continue to expect BrasilPrev to achieve stronger than market growth over the next two decades, so we are particularly excited about the long-term extension."

The definitive agreement includes the same key elements outlined in the Memorandum of Understanding related to BrasilPrev, which was signed by both companies and announced in October 2009. Under the terms:

  • The joint venture will be co-managed, with The Principal owning 50.01 percent of BrasilPrev common stock and Banco do Brasil owning 49.99 percent; and
  • The Principal's economic interest (share of profits) will be 25.005 percent and Banco do Brasil's share, 74.995 percent. The Principal's previous share of profits was 46.01 percent.

"There is significant value in securing a long-term, exclusive distribution arrangement with Banco do Brasil," added Norman Sorensen, president and chief executive officer of Principal International, commenting on the exchange of economic interest for the long-term extension. "Not only is Banco do Brasil the market leader, but they also continue to expand their network which translates into even greater opportunities for BrasilPrev going forward."

"In the past five years, BrasilPrev has achieved compounded annual growth rates of operating earnings of 25 percent and 30 percent in assets under management, reflecting BrasilPrev's ability to meet the country's increasing need for world-class pension products," Sorensen said. "Looking ahead, we expect continued growth at an ever faster pace, as Brazil's middle class continues to expand."

Forward looking and cautionary statements

This press release contains forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update or revise these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended December 31, 2009, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions that may significantly affect the company's ability to meet liquidity needs, access to capital and cost of capital; difficult conditions in the global capital markets and the general economy, which the company does not expect to improve in the near future, that may materially adversely affect the company's business and results of operations; the actions of the U.S. government, Federal Reserve and other governmental and regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended effect; the risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the company; investment risks which may diminish the value of the company's invested assets and the investment returns credited to customers, which could reduce sales, revenues, assets under management and net income; requirements to post collateral or make payments related to declines in market value of specified assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.'s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and default of the company's re-insurers.

About the Principal Financial Group

The Principal Financial Group(R) (The Principal(R))2 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $284.7billion in assets under management3 and serves some 18.9 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States.Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit

About Banco do Brasil

Banco do Brasil is the leading financial institution in Brazil, listed on the Novo Mercado. Its main shareholder is the Federative Republic of Brazil with a free float close to 22%. It is the bank with the largest network in Brazil (with over 5,000 branches in 3,500 cities and 18,000 points of service) and has a clear leadership position with 54 million customers, over 400 billion dollars of assets, and nearly 200 billion dollars of deposits. Mercado: BBAS3)

1As of December 31, 2009.

2"The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

3As of December 31, 2009

SOURCE: Principal Financial Group

Principal Financial Group
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