Oct. 27, 2009 (Business Wire) -- Principal Financial Group, Inc. (NYSE: PFG) today announced that The Principal^® and Banco do Brasil (Novo Mercado: BBAS3) have signed a Memorandum of Understanding related to BrasilPrev Seguros e Previdência S.A. (BrasilPrev), their pension and long-term asset accumulation joint venture in Brazil.

Under the terms of the Memorandum, and following completion of all necessary approvals and transactions, BrasilPrev will have, for 23 years, the exclusive right to manufacture and distribute pension and other long-term asset accumulation products within the Banco do Brasil network. Other key elements of the Memorandum include:

• Co-management of the joint venture, with The Principal owning 50.01 percent of BrasilPrev common stock and Banco do Brasil owning 49.99 percent;
• Economic interests (sharing of profits) of 25.005 percent to The Principal and 74.995 percent to Banco do Brasil; and
• The intent to negotiate BrasilPrev’s acquisition of the pension portfolio of Mapfre Nossa Caixa.

“We are very pleased to announce the long-term continuation of our successful strategic partnership with Banco do Brasil,” said Larry Zimpleman, chairman, president and chief executive officer of The Principal. “Over the past 10 years, combining the leading pension expertise from The Principal and the power of Banco do Brasil’s distribution network, BrasilPrev has become one of Brazil’s top retirement services companies, with three million accounts and nearly $15 billion in assets under management¹. We see even greater opportunity going forward as Banco do Brasil continues to expand its distribution reach and strengthens its commitment to increasing market share.”

“Continuing our partnership with The Principal was a strategic decision for Banco do Brasil, given their deep pension expertise and broad industry leadership,” said Aldemir Bendine, president of Banco do Brasil. “We look forward to building on the strong relationships we’ve developed over the past 10 years, based on a shared commitment to quality, focus on innovation and passion for helping customers achieve financial success.”

Adds Norman Sorensen, president and chief executive officer of Principal International: “The 23-year commitment reflects the strength of The Principal and Banco do Brasil relationship and the shared desire to build on the success of BrasilPrev. In the past five years BrasilPrev has achieved compounded annual growth rates of operating earnings of 25 percent and 43 percent growth in assets under management. Expectations are for even greater future growth driven by:

• The expansion of the Banco do Brasil network.