Vendor business helps CIT Bank

22/01/2012

 

CIT Group sees opportunities to grow loan volume as its clients’ businesses stabilize and it makes progress on restructuring its balance sheet, says CEO John Thain. The former Merrill Lynch chief executive, said demand for commercial loans remains solid despite slow economic growth. He also reiterated the company's interest in making portfolio acquisitions as it works to grow assets. In Europe, “There are a lot of vendor assets that are currently for sale,” he said. “We do see a good pipeline,” he continued, and assuming the economy continued to improve, there is an “opportunity for us to continue to grow.”

After CIT came out of bankruptcy, and Thain joining the company in February 2010, the focus has been working to rebuild CIT's management team, refinance or eliminate high-cost debt, and diversify funding sources. The company has been pushing to make more of its loans out of its bank subsidiary, which it wants to build up, recently switching its vendor leasing portfolios into it. It also wants to boost deposits, which are a more stable, cheaper source of funding than issuing debt, its primary strategy before its bankruptcy.

CIT Bank has originated about $3 billion in new loan commitments this year and funded about $2 billion of that amount, Thain said, and, “We will continue to originate most of our U.S. lending and leasing business in the bank.”

CIT has seen particularly strong demand in its transportation finance business, which provides aircraft and rail leasing to airlines and other companies. Thain has said it is considering portfolio acquisitions as one way to grow its asset base.

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