CIT CIT Group Inc

CIT Group Inc. said it would focus on its core commercial businesses, trimming $125 million in expenses by 2018 as the firm seeks to shore up its operations.

The announcement of a turnaround plan was expected as CIT's business has been pressured recently. Its shares have declined and profitability has dropped.

CIT said Wednesday that it would transition to a leading national middle-market bank, focusing on its core commercial lending, leasing and depository businesses. The company said it would complete the separation of its commercial air business by the end of the year.

"With our recent actions and the decisions we are announcing today, we are strengthening our culture of ownership, accountability and transparency at CIT," said Ellen R. Alemany, incoming chairwoman and chief executive of CIT, and CEO of CIT Bank. "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."

The company said it planned to complete its integration of OneWest Bank, a Los Angeles-area firm that was bought by CIT Group Inc. last year, by the end of 2016.

CIT had said it expected the purchase of OneWest Bank to significantly improve its profitability. Instead, profitability has fallen, and chief Executive John Thain in October announced he was leaving the bank.

As part of the turnaround plan, the firm said it hoped to achieve a return on tangible common equity of 10% by 2018 by reducing its operating expenses by $125 million. CIT said it would improve funding costs by growing its deposit base and transitioning the deposit mix to lower-cost deposits.

CIT also said it had strengthened its underwriting standards and improved its risk profile, and would maintain a "strong risk-management culture" going forward. This includes credit discipline, a "culture of compliance and integrity," and strong regulatory relationships, according to an investor presentation on the company's website.

Ms. Alemany and Carol Hayles, chief financial officer, were expected to host a strategic update call at 8 a.m. EDT on Wednesday.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

March 23, 2016 08:05 ET (12:05 GMT)

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