Principal Financial Group Reports Mixed Results with Increased Net Income and Decreased Revenues in Q2 2025

**Principal Financial Group Reports Mixed Results in Second Quarter 2025**

Principal Financial Group (PFG) reported net income of $433.5 million for the three months ended June 30, 2025, compared to $356.8 million for the same period in 2024. For the six months ended June 30, 2025, net income totaled $496.4 million, a decrease from $888.8 million reported in the first half of 2024. The company attributed the three-month increase to a one-time expense accrual release and favorable market performance on required regulatory investments in Latin America, offset by a decrease due to the change in the fair value of funds withheld embedded derivative. The six-month decrease was primarily due to the change in the fair value of the funds withheld embedded derivative and the impact from asset write-downs related to exiting its sponsor and trustee roles in Hong Kong for Mandatory Provident Fund Schemes (MPF Schemes), partially offset by the unfavorable one-time impact of the YRT Reinsurance Transactions in 2024.

Operating revenues for the second quarter of 2025 totaled $3.67 billion, a decrease of $639.5 million compared to $4.31 billion in the second quarter of 2024. For the six months ended June 30, 2025, operating revenues were $7.37 billion, down from $8.36 billion for the same period in the prior year. The decrease in premiums and other considerations was primarily due to lower sales of single premium group annuities with life contingencies in the Retirement and Income Solutions segment. Fees and other revenues increased for the Principal Asset Management segment due to higher management and performance fee revenue.

Strategic developments included an agreement with Bank Consortium Trust Company (BCT) to expand investment management capabilities and exit sponsor and trustee roles in Hong Kong for MPF Schemes. This transaction, expected to close in the first half of 2026, resulted in a $20.0 million loss from the impairment of a distribution agreement intangible asset and a $77.0 million loss from classifying a customer relationship intangible asset as held-for-sale. The company also completed the exercise of its rights under a put option with a Delaware trust, issuing $400.0 million of 4.111% Senior Notes due 2028 in exchange for Eligible Assets, and used the proceeds to repay senior notes that matured on May 15, 2025.

Key operational developments included a decrease in assets under management (AUM) in the Principal Asset Management segment. AUM totaled $723.0 billion as of June 30, 2025, compared to $670.6 billion as of June 30, 2024. The increase was driven by market performance, partially offset by net cash outflows. The company also reported that it had posted $6.9 billion in commercial mortgage loans and residential first lien mortgages to satisfy collateral requirements associated with funding agreements with the Federal Home Loan Bank of Des Moines.