CIT Group in Livingston, N.J., reported higher profits, boosted by gains from its acquisition of OneWest Bank.
The $67 billion-asset company earned $147 million in the first quarter, or 42% more than a year earlier. Earnings per share were 73 cents, falling 3 cents short of an estimate of analysts polled by Bloomberg.
Loan growth from the company’s controversial OneWest deal pushed profits higher. The August 2015 acquisition put CIT in the category of systemically important financial institutions.
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Getting CIT back on track could be a legacy-defining assignment for veteran banker Alemany, in much the same way as the firms turnaround after bankruptcy was viewed as a chance at redemption for John Thain. Success would be no small feat.
March 23 -
The bank's approval last year to buy OneWest Bank included a condition to submit an updated Community Reinvestment Act plan, but the CRA program now being presented by CIT is far from adequate.
February 26 - New York
Fourth-quarter profit tanked at CIT Group in New York, as the costs to dismiss former OneWest Bank executives, and losses tied to the sale of Brazilian businesses weighed on results.
February 2
Net interest revenue jumped to $209 million, compared with $10 million a year earlier. Loans grew 62%, to $31 billion. The net finance margin expanded by 51 basis points to 3.74%.
Fees also increased. Noninterest revenue rose 10% to $676 million, in part from gains on the sale an equipment finance division in the U.K.
Noninterest expenses climbed 30% to $582 million, mostly from higher compensation costs.
Ellen Alemany took over as chief executive at CIT Group this month, succeeding former CEO John Thain. The leadership transition comes as investors have expressed concern about dwindling returns and have pushed the company to shrink.
Last fall CIT announced plans to spin off its aircraft unit. It is also in the process of selling units in China and Canada.
“Since I recently became CEO and defined our strategy to become a leading national middle-market bank, our team has been very focused on executing on our plan to improve returns,” Alemany said in a press release Thursday.
