CIT Vendor Finance, the leasing division of US-headquartered CIT Group, has reported a third-quarter pre-tax loss of $57m (44m), contributing to a $182.2m loss for the first nine months of the year.
The loss represents a 166% drop from the $85.4m third-quarter profit recorded by the division last year and down 79% sequentially from the $12.1m loss in the second quarter of 2012.
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New business volume for the division was $705m, down marginally from the $762m in the previous quarter but up from $648m in the third quarter of 2011.
New business volume for the nine months to 30 September was $2.14bn, up 15% on the previous year.
Redeeming features
As in the previous quarter, nearly as all US-funded volume was originated by CIT Bank which also enjoyed an increase in deposits.
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By GlobalDataThe continued quarterly loss, which totalled $304.9m for CIT Group in the third quarter and $822.1m for the year-to-date, is the result of the firm’s debt redemption programme.
The group’s debt pay-off for the quarter was $471m and $1.4bn for the year-to-date.
When debt repayment is excluded, CIT Vendor Finance made a modest pre-tax profit of $2.1m while CIT Group recorded $170m, down slightly from $176m year-on-year.
CIT Corporate Finance also recorded a loss for the period of $25.3m although, following a profitable first half of the year, the division reported a year-to-date profit of $94.5m.
Vendor Finance financing and leasing assets grew to $5.2bn, representing increases of 3% from the second quarter and 7% year-on-year. Total financing leasing assets including from the Corporate, Transportation and Trade Finance divisions totalled $29.6bn at the end of the third quarter.
‘Strategic milestones’
John Thain, chairman and chief executive of CIT, said: "We achieved several strategic milestones this quarter that will lower our funding costs and better position CIT for future profitability.
"We eliminated the last of our $31 billion of restructuring-related debt, grew commercial assets for the fourth consecutive quarter, and exceeded $3.5 billion in internet deposits at CIT Bank.
"We will continue to focus on achieving our financial targets as we meet the needs of our small business and middle market clients."
grant.collinson@vrlfinancialnews.com
