All change at CIT Group

CIT Group has confirmed it is moving ahead with plans to reposition itself as a bank, and has also announced a new executive team in the wake of news that John Thain (pictured above), the executive who has led the organization’s turnaround, is to retire.

CIT has given details of a series of strategic initiatives designed to advance it transition to a US commercial bank. These include exploring alternatives for its $10 billion commercial air business, and selling its CIT Canada and CIT China businesses.

“Over the past five years we have made significant progress in transforming CIT,” said John Thain, CIT Group chairman and chief executive officer. “Following the completion of our OneWest Bank acquisition, we have decided to explore the strategic alternatives for our commercial air business and to sell our non-transportation-related businesses in Canada and China.”

“These strategic initiatives will position CIT for long-term success by further simplifying our bank-centric business model as we focus on meeting the financing needs of our US small business and middle market customers. We believe these decisions will increase shareholder value,” Thain explained.

CIT maintains one of the leading commercial air franchises in the world with one of the youngest and most technologically advanced fleets. It owns, finances and manages a fleet of more than 350 commercial aircraft serving approximately 100 customers in 50 countries. It provides leasing and financing packages, including operating leases and structuring and advisory services, for commercial airlines worldwide.

The company said these announcements will further advance CIT’s efforts to simplify and realign its business model and will substantially complete its exit from its international businesses.

New management team

CIT Group’s board of directors has announced a series of management changes prompted by Thain’s decision to retire effective March 31, 2016. Thain is not severing all ties with the company which he has pulled from near collapse to becoming a key player in the asset finance sector, and he will continue to serve as chairman of the board of directors.

His role as chief executive officer will be taken by Ellen Alemany, who also becomes a member of the management team as vice chairman of the board effective November 1, 2015. Alemany replaces current vice chairman Steven Mnuchin who will step down from management effective March 31, 2016, and will remain as a member of the board of directors.

In addition, CIT corporate controller Carol Hayles has been appointed as chief financial officer.

Thain farewell

Vice Admiral John Ryan, CIT lead director, speaking on behalf of the board of directors, said: “John has been a pivotal leader during one of the most challenging times in CIT’s more than 100 year history. Under his leadership he has overseen the successful corporate and financial restructuring of CIT.”

“Since taking the helm in 2010, he returned CIT to profitability; rebuilt its management team; eliminated or refinanced approximately $31 billion of high-cost debt; oversaw the termination of the company’s written agreement with the Federal Reserve; returned more than $1.7 billion to shareholders; established a premier internet bank, and completed the acquisition of Direct Capital and OneWest Bank. On behalf of the board, employees and shareholders we extend our gratitude to John for his success and commitment to CIT,” Ryan added.

Thain commented: “It’s been a pleasure to lead an outstanding group of employees over the past five years and oversee CIT’s successful restructuring. Their hard work and commitment were critical to our efforts to rebuild and grow CIT and has helped ensure that CIT continues to play an important role in supporting small and middle market businesses, two sectors that remain the backbone of the US economy.”

Scott Parker leaves

Separately, CIT Group has announced that Scott Parker, executive vice president and chief financial officer, will leave the company in November to serve as executive vice president and chief financial officer of Springleaf Holdings, a leading consumer finance company providing loan products to customers through its nationwide branch network and online presence.

Parker joined CIT in July 2010 and has served as the company’s principal financial officer overseeing all financial operations including the accounting, planning, tax, treasury and investor relations departments.

Thain said: “Scott has been an important member of the CIT senior leadership team and has played a central role in the financial restructuring of CIT. He led our efforts to improve our liability structure as we successfully eliminated or refinanced approximately $31 billion of high-cost debt and was instrumental in our efforts to return approximately $1.7 billion to investors. In addition, he worked with the team to improve our commercial franchises, as well as oversaw the exits of our non-strategic portfolios over the past five years.”