Growth Companies


The lender said it would also explore strategic alternatives for its $10 billion commercial air business and sell its CIT Canada and CIT China busi...
Katie Kuehner-HebertOctober 22, 2015

CIT Group on Thursday announced major changes to its management — including the succession of chief executive John A. Thain, as well as the company’s intent to sell parts of its business to further transition CIT to a commercial bank.

New York City-based CIT said that Thain would retire as CEO effective March 31, to be replaced by CIT Board Member Ellen R. Alemany. Alemany was formerly head of The Royal Bank of Scotland Americas and chairman and CEO for RBS Citizens Financial Group. Alemany will become a member of the management team as vice chairman effective Nov. 1. Thain will remain as chairman of CIT’s board after his retirement.

Only two other women run a U.S.-based commercial bank with more than $45 billion in assets, KeyCorp’s Beth Mooney and Synchrony Financial’s Margaret Keane, according to data compiled by Bloomberg. Even though women hold more than half of the jobs in financial services, they account for less than a third of executive and senior-level positions, according to research firm Catalyst Inc.

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CIT also announced the appointment of corporate controller Carol Hayles as chief financial officer effective Nov. 1. Prior to CIT, Hayles spent 24 years at Citigroup where she served as deputy controller, leading the SEC and regulatory reporting functions.

In addition, Vice Chairman Steven Mnuchin will step down from management effective March 31, but remain as a member of the board.

Commenting on the changes, Fitch Ratings said, “CIT’s ratings are unaffected at this time, but Fitch notes that execution risk is likely to be elevated for some time while CIT seeks to manage the transition of two of its senior most leaders, the continued integration of OneWest Bank N.A. (OneWest), and the potential sale of a meaningful portion of the existing business.”

Ftich was speaking of CIT’s separate announcement that it would explore strategic alternatives for its $10 billion commercial air business, and sell its CIT Canada and CIT China businesses.

“As CIT’s bank has grown in size, synergies from the aircraft leasing business have become less meaningful for the overall business given limitations on how much of the aircraft leasing business can be funded with bank deposits and how much of CIT’s net operating loss carryforward can be captured with gains in the aircraft leasing business,” Fitch Ratings analysts said. “Nevertheless, an aircraft leasing divestiture would reduce overall earnings diversity by business line and geography and the questions related to use of proceeds remains unanswered. At June 30, 2015, pro forma for the OneWest transaction, financing and leasing assets from commercial airlines (including the commercial aerospace portfolio and additional financing and leasing assets) represented 14.8% of total assets.”

“Over the past five years we have made significant progress in transforming CIT,” Thain said in a press release.

“Following the completion of our OneWest Bank acquisition, we have decided to explore the strategic alternatives for our commercial air business and to sell our non-transportation-related businesses in Canada and China. These strategic initiatives will position CIT for long-term success by further simplifying our bank-centric business model as we focus on meeting the financing needs of our U.S. small business and middle-market customers.”

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