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CIT Group’s Q2 Loss Reflects COVID-19 Impact

July 21, 2020, 07:18 AM
Filed Under: Corporate Ratings

CIT Group Inc. reported its second quarter 2020 financial results. The company posted a second-quarter loss to common shareholders of $98 million. That compares with net income of $128 million in the second quarter a year ago.

Excluding noteworthy items, which were primarily related to the integration of Mutual of Omaha Bank (MOB) and other cost-reduction initiatives, it reported a second-quarter loss to common shareholders of $61 million. That compares with income of $127 million a year ago.

Its financial results and trends in the second quarter 2020, including its provision for credit losses, continue to reflect the impact of the global pandemic from the spread of the COVID-19 virus and its adverse effect on the macroeconomic environment.

“The strength and resiliency of CIT today is the result of a multi-year enterprise transformation. Our seasoned management team has the agility to navigate the current environment, while supporting our customers, managing our risks, and unlocking areas of opportunity. While our results continued to be affected by the pandemic, our diverse franchise and deep industry and asset class expertise allowed us to win business in sectors of strength in the commercial market,” said Chairwoman and Chief Executive Officer Ellen R. Alemany.

Alemany continued, “The integration of the recent acquisition remains on track, and we are achieving efficiencies ahead of schedule as we bring our businesses together. In addition, we posted solid growth in our lower-cost homeowner association and commercial deposit channels, as we advanced those initiatives. While the economic environment remains dynamic, we are focused on continually adapting, improving and delivering on opportunities that strengthen our company.”

Strategic Pillar-Grow Core Businesses

  • Total loans and leases decreased during the quarter, primarily due to a decline in customer receivables within its factoring business and the repayment of defensive revolver drawdowns. Average loans and leases grew 2 percent from the prior quarter.
  • Origination activity focused on certain key verticals in Commercial Banking where it has leadership positions and deep expertise.
  • Recent commercial loan originations have wider credit spreads and stronger structural protections, including interest rate floors

For the full financial report, visit here.

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