CIT Group reports a net loss of $16 million on debt payments
Lender CIT Group Inc. posted a third-quarter loss of $16 million, or 8 cents per share, on Tuesday. That is down from a profit of $116 million, or 58 cents a share, last year. The company's loss is attributed to costs from prepayments made on first and second-lien debt and is lower than the average analyst estimate of a loss in the 12 cents-a-share range. The company reported a negative net interest revenue of $91 million in 3Q, compared to a negative net interest revenue of $203.6 million in the second quarter. In 3Q, the company's provisions for credit losses fell 44% from $85 million in the second quarter to $48 million. It also declined 71% from last year on lower net-charge offs and improved credit quality. Net charge-offs – or debts deemed unlikely to be repaid – hit $47 million in the third quarter, down from $56 million in the second quarter and $101 million in the third quarter of 2010. The provision for credit losses was $48 million, down from $85 million in the second quarter and $165 million from last year. The company's lower loss reserves are the result of a continued reduction in specific reserves and improved portfolio credit quality. Meanwhile, the company's allowance for loan losses fell to $414 million from $424 million in June. Write to Kerri Panchuk.