CIT CIT Group Inc

CIT Group Inc. agreed to sell its commercial aircraft leasing business to Avolon Holdings Ltd., a deal CIT hailed as an important step as it focuses on banking.

The companies said the deal is worth $10 billion and includes the business's operations, forward order commitments, assets of $11.1 billion and liabilities of $1.7 billion.

CIT shares rose 8.6% to $39.53 after hours.

CIT said the sale "will strengthen our balance sheet, simplify our business and enable us to return significant capital to our shareholders."

As a result, CIT said it received a "non-objection" from the Federal Reserve Bank of New York for an amended capital plan, subject to the closing of the deal.

CIT embarked on a "dual track" process for the leasing business, taking steps toward a potential spinoff while also looking for a buyer.

The lender unveiled a turnaround plan in March calling for it to focus on domestic banking.

CIT bought OneWest Bank NA's parent company for $3.4 billion last year. The deal pushed CIT above the threshold of $50 billion in assets that subjects it to tougher regulation as a systemically important financial institution, or SIFI.

Avolon is a unit of Bohai Capital Holding Co. Chinese companies have become more active in the aircraft-leasing sector as China's airlines report higher traffic. The leasing sector in general is thriving as more airlines opt for the flexibility of renting instead of buying planes.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

October 06, 2016 18:25 ET (22:25 GMT)

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