Des Moines, Iowa (May 14, 2004) -- The Principal Financial Group Inc. sold its mortgage banking business to Citigroup for $1.26 billion this week in a move aimed at sharpening its focus on its core business of providing retirement and employee benefit solutions for small and midsized companies.

Under the terms of the agreement, Citigroup will acquire the stock of Principal Residential Mortgage Inc., and Principal Residential Mortgage employees will transfer to Citigroup at the close. The transaction, which has been approved by Principal's board of directors, is expected to close in third quarter, subject to regulatory approval.

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