CIT Provides Update on Strategic Plan – Creating a Leading National Middle Market Bank
March 23 2016 - 6:30AM
Business Wire
- Roadmap to Achieve 10 Percent Return on
Tangible Common Equity (ROTCE) by 2018
- Focusing on Core Commercial
Businesses
- Reducing Operating Expenses by $125
Million
- Expecting to Complete Commercial Air
Separation by End of 2016
- Strategic Update Call Scheduled at 8:00
AM EDT
CIT Group Inc. (NYSE:CIT), cit.com, a leading provider of
commercial lending and leasing services, today announces its
strategic plan designed to drive long-term shareholder value. In
connection with today’s strategic update call, CIT is delivering a
slide presentation which is available at cit.com/investor.
“Today, CIT announces steps to focus on our core businesses,
improve our financial performance and transition our strategy to
become a national middle market bank serving our customers with an
integrated set of financing and deposit products,” said Ellen R.
Alemany, incoming Chairwoman and CEO of CIT Group, and CEO and
President of CIT Bank. “The CIT Board of Directors and management
team have been conducting a strategic review of our businesses and
are taking decisive actions to chart a clear path forward to drive
value for shareholders and to demonstrate our commitment to our
customers, communities and employees.”
CIT is committed to positioning the company to deliver long-term
value for shareholders while maintaining a strong risk management
culture. CIT’s strategic priorities to advance its transition to a
leading national middle market bank include:
- Focusing on Core Commercial
Businesses: Invest in growth and strengthen its capabilities
with respect to its core commercial lending, leasing (including
rail), and depository solutions for middle market customers, as
well as:
- Complete the separation of the
Commercial Air business by the end of 2016; and
- Complete the integration of OneWest
Bank by year end.
- Improving Profitability and
Returning Capital: Achieve a return on tangible common equity
(ROTCE) of 10 percent by 2018 by executing on initiatives to:
- Reduce operating expenses by $125
million by 2018;
- Improve funding costs by growing its
deposit base and transitioning the deposit mix to lower cost
deposits;
- Efficiently realize substantial cash
flow and capital from deferred tax assets; and
- Return excess capital to shareholders,
subject to regulatory approvals.
- Maintaining Strong Risk
Management: The improvement in CIT’s credit ratings reflects
the strength of its franchises, strong liquidity and capital
positions, and the expansion and diversification of deposit
funding. Additionally:
- CIT has improved its risk profile and
strengthened its underwriting standards to focus on appropriate
risk adjusted returns throughout cycles and to leverage its
expertise as an asset-backed lender; and
- Going forward, the company will
continue to ensure it maintains high risk management standards and
evolves with industry requirements.
Ms. Alemany concluded, “Our Board and management team are fully
aligned with shareholders and are committed to thoughtfully
considering their feedback into our ongoing decision-making. With
our recent actions and the decisions we are announcing today, we
are strengthening our culture of ownership, accountability and
transparency at CIT. Our strategic plan of focusing on our core
businesses and leveraging the strength of our franchises and risk
management practices will maximize value for shareholders and
position CIT as a leading national middle market bank.”
Conference Call and Webcast
Ms. Alemany and Carol Hayles, Chief Financial Officer, will host
a strategic update call at 8:00 a.m. EDT on Wednesday, March 23,
2016, which will be broadcast live on the investor relations
section of the company’s website at cit.com/investor or by dialing:
888-317-6003, elite entry code: 2160502. An archived version of the
conference call and supporting materials will be available on the
CIT website within the investor relations section after the live
conference call.
About CIT
Founded in 1908, CIT (NYSE: CIT) is a financial holding company
with more than $65 billion in assets. Its principal bank
subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has
more than $30 billion of deposits and more than $40 billion of
assets. It provides financing, leasing and advisory services
principally to middle market companies across a wide variety of
industries primarily in North America, and equipment financing and
leasing solutions to the transportation sector. It also offers
products and services to consumers through its Internet bank
franchise and a network of retail branches in Southern California,
operating as OneWest Bank, a division of CIT Bank, N.A. cit.com
Forward-Looking Statements
This press release contains forward-looking statements
within the meaning of applicable federal securities laws that are
based upon our current expectations and assumptions concerning
future events, which are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those anticipated. The words “expect,” “anticipate,”
“estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,”
“project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,”
“pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,”
“believe,” “potential,” “continue” or the negative of any of those
words or similar expressions is intended to identify
forward-looking statements. All statements contained in this press
release, other than statements of historical fact, including
without limitation, statements about our plans, strategies,
prospects and expectations regarding future events and our
financial performance, are forward-looking statements that involve
certain risks and uncertainties. While these statements represent
our current judgment on what the future may hold, and we believe
these judgments are reasonable, these statements are not guarantees
of any events or financial results, and our actual results may
differ materially. Important factors that could cause our actual
results to be materially different from our expectations include,
among others, the risk that CIT is unsuccessful in implementing its
strategy and business plan, the risk that CIT is unable to react to
and address key business and regulatory issues, the risk that CIT
is unable to achieve the projected revenue growth from its new
business initiatives or the projected expense reductions from
efficiency improvements, and the risk that CIT becomes subject to
liquidity constraints and higher funding costs. We describe
these and other risks that could affect our results in Item 1A,
“Risk Factors,” of our latest Annual Report on Form 10-K for the
year ended December 31, 2015, which was filed with the Securities
and Exchange Commission. Accordingly, you should not place undue
reliance on the forward-looking statements contained in this press
release. These forward-looking statements speak only as of the date
on which the statements were made. CIT undertakes no obligation to
update publicly or otherwise revise any forward-looking statements,
except where expressly required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20160323005355/en/
CIT MEDIA RELATIONS:Matt Klein, 973-597-2020Vice
President, Media RelationsMatt.Klein@cit.comorCIT INVESTOR
RELATIONS:Barbara Callahan, 973-740-5058Senior Vice
PresidentBarbara.Callahan@cit.com
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