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July 30, 2010updated 12 Apr 2017 4:21pm

CIT “smaller, safer” as profits recover

American CIT Group has posted a second quarter profit of $142.1 million (109 million), marking the equipment finance giants second consecutive quarterly profit after emerging from bankruptcy at the end of last year. In the equivalent reporting period one year ago, just four months before the group filed for Chapter 11 bankruptcy protection, CIT lost $1.7 billion (1.3 billion)

By Fred Crawley

American CIT Group has posted a second quarter profit of $142.1m (€109m), marking the equipment finance giant’s second consecutive quarterly profit after emerging from bankruptcy at the end of last year.

The result is an improvement on CIT’s Q1 profit figure of $97.3m, and represents earnings of 71 cents per share.

In the equivalent reporting period one year ago, just four months before the group filed for Chapter 11 bankruptcy protection, CIT lost $1.7bn. 

Former Merrill Lynch chief executive John Thain, who was appointed to manage CIT in February, announced following the posting of results that the group would pay down around $1bn in high-cost debt, after which it would begin refinancing the remaining $3bn.

In addition to these repayments, Thain outlined intentions to shrink CIT’s balance sheet by offering “smaller, safer, more durable” loans, and by selling off non-core assets – a process already begun with the sale of CIT’s Australian and New Zealand arms.

fred.crawley@vrlfinancialnews.com

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