CIT Posts 10th Straight Quarterly Loss
CIT Group, a lender to small- and mid-sized businesses, posted a Q309 loss of $1.03bn, or $2.47 per share, as the company attempts to emerge from bankruptcy protection by the end of the year. CIT filed for bankruptcy on November 1, resulting in “a virtual standstill in signing new business, client terminations/notice of terminations and a hold back of business of clients that have yet to technically terminate,” CIT said in a Securities and Exchange Commission (SEC) filing. Q309’s losses compare to $301.1m loss in Q308. Year-to-date losses for the nine months ending September 30 were $2.99bn in 2009 and $493.9m in 2008. Interest and fee income totaled $549.6m in the quarter, down nearly 36% from Q308. CIT paid less in interest expenses on long-term borrowing, but interest on deposits more than doubled. Total interest expenses declined 9% to $693.8m from Q308 to Q309. CIT’s provision for credit losses was $701.8m in Q309, up substantially from $202.4m in Q308. CIT's weak quarterly performance comes just weeks after the company announced the expansion of an existing $3bn senior secured credit facility. The new $4.5bn private capital infusion, from a diverse group of lenders, arrived after the company turned down an offer from private equity investor Carl Icahn to provide CIT with a new $4.5bn term loan. Write to Austin Kilgore.