CIT reports $1 million pre-tax loss in Q4-'09
18 March 2010
CIT Group Inc, a leading provider of finance to small businesses and mid cap companies, has reported a fourth quarter pre-tax loss of $1.0 billion and a 2009 net loss attributable to common stock of $4 million.
The company reported net earnings of $3.2 billion in the fourth quarter, including FSA and reorganisation items. Excluding those items, CIT reported a fourth quarter pre-tax loss of $1.0 billion due to low levels of net finance revenue, reflecting high borrowing costs, and high credit costs, particularly in corporate finance.
Total commercial net charge-offs for the fourth quarter were $385 million, 4.77 per cent of average finance receivables, with over half in the print, media, gaming, energy, small business lending and commercial real estate sectors.
Non-accrual loans for the commercial segments (before FSA) were $2.6 billion, representing 8.8 per cent of finance receivables at 31 December 2009. The fourth quarter provision for credit losses was $835 million, which increased the allowance for loan losses to $1.8 billion prior to its elimination through FSA .
Total assets as of 31 December 2009 were $60 billion, including finance and leasing assets of $46.1 billion. Total cash at year-end was $9.8 billion, which included approximately $6.7 billion of corporate and operating cash, $1.7 billion of cash at CIT Bank, and $1.4 billion of restricted cash.
CIT's consolidated Tier 1 and Total Capital Ratios were 14.2 per cent at 31 December 2009.