CIT reports second quarter net loss of $71 million
30 July 2012
CIT Group Inc, a leading provider of financing to small businesses and middle market companies, today reported a net loss of $71 million (or $0.35 per diluted share) for the quarter ended 30 June 2012.
This is against a net loss of $50 million ($0.25 per diluted share) for the second quarter of 2011 and includes debt refinancing charges of $286 million related to the prepayment of $4.2 billion of high cost debt, while the year-ago period included debt refinancing charges of $163 million related to the prepayment of $2.5 billion of high cost debt.
Pre-tax income excluding debt refinancing charges was $245 million, up from $134 million in the year ago quarter.
Net loss for the six months ended 30 June 2012 was $517 million, $2.57 per diluted share, and included debt refinancing charges of $906 million, compared to net income of $16 million ($0.08 per diluted share), in the comparable 2011 period.
''We continue to make progress towards our long term targets. Our results this quarter, while impacted by the repayment of high cost debt, reflect our efforts to grow our businesses as we meet the financing needs of our small business and middle market clients,'' said John Thain, chairman and chief executive. ''CIT Bank reached two significant milestones - $2 billion of internet deposits and $10 billion of assets - and will continue to play an important role in our growth strategy.''
Second quarter operating results reflect increased business activity as well as continued execution of liability management strategy. While CIT Group reported a $42 million pre-tax loss for the quarter, pre-tax income excluding debt refinancing charges was $245 million, up from $214 million and $134 million in the first quarter of 2012 and the year-ago quarter, respectively. Pre-tax income excluding debt refinancing charges and net FSA accretion/amortisation was $119 million, up from $17 million in the year-ago period but down sequentially primarily due to lower gains on asset sales.