CIT first quarter net income down 45.5 per cent at $66 million

CIT Group Inc has reported a net income of $66 million (or $0.33 per diluted share) for the quarter ended 31 March 2011, down from $145 million ($0.72 per diluted share) a year ago.

CIT, a leading provider of financing to small businesses and middle market companies, said the 45.5 per cent decline in profitability has been due to a high base effect.

"We continue to make progress rebuilding CIT," said John A Thain, chairman and chief executive officer. "We are advancing our bank strategy, optimising our portfolio, managing expenses and reducing our cost of capital. We will continue to focus on prudently growing our core businesses and remain committed to creating long-term shareholder value."

Net income of the company declined from first quarter 2010 primarily due to a $364 million decrease in net FSA accretion, reflecting fewer asset prepayments and the accelerated repayment of debt carried at a discount, CIT said, adding that its debt prepayment fees for the current quarter more than doubled to $35 million from the 2010 first quarter.

"First quarter results reflect lower funding and credit costs, gains on asset sales, reduced operating costs and an increase in income tax provision," the company said.

Total assets stood at $51 billion, down $8 billion for the previous year quarter and unchanged from the previous quarter.