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October 28, 2011updated 12 Apr 2017 4:11pm

CIT’s asset finance business grows profits

CIT Group, the US finance company, made a loss in the third quarter as it paid down debt, but there was strong growth in its vendor finance division. CIT, which emerged from bankruptcy in 2009, reported a net loss of $16m (11.2m) for the quarter for September 30, 2011 -- down from net income of $116m (81.8m) a year ago. However, pre-tax earnings at the companys vendor-finance business were $77m (54.3m), up from $22m (15.5m) in the previous quarter, but down from $89m (62.7m) in the year-earlier period.

By Nick Huber

CIT Group, the US finance company, made a loss in the third quarter as it paid down debt, but there was strong growth in its vendor finance division.

CIT, which emerged from bankruptcy in 2009, reported a net loss of $16m (€11.2m) for the quarter to September 30 2011 — down from net income of $116m (€81.8m) a year ago.

However, pre-tax earnings at the company’s vendor finance business were $77m (€54.3m), up from $22m (€15.5m) in the previous quarter.

CIT, which provides $35 billion in finance and leasing assets, said that growth in vendor finance came from lower credit costs, increased gains on asset sales, and lower operating expenses.

CIT said that total financing and leasing assets was $4.5 billion (€3.17bn), down from $4.7bn (€3.31bn) in the previous quarter.

New business increased two per cent to $607m (€428.3m) from the previous quarter.

John Thain, CIT chairman and chief executive officer said: “Our franchises remain strong and continue to provide much needed financing to the small business and middle market sectors despite the continued uncertainties around the U.S. and global economies. We advanced our 2011 priorities by growing business volumes, accessing diverse funding markets, and further reducing high cost debt.”

 

 

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