CIT Group today announces its strategic plan designed to drive long-term shareholder value. In connection with today’s strategic update call, CIT is delivering a slide presentation which is available at cit.com/investor.

“Today, CIT announces steps to focus on our core businesses, improve our financial performance and transition our strategy to become a national middle market bank serving our customers with an integrated set of financing and deposit products,” said Ellen R. Alemany, incoming Chairwoman and CEO of CIT Group, and CEO and President of CIT Bank. “The CIT Board of Directors and management team have been conducting a strategic review of our businesses and are taking decisive actions to chart a clear path forward to drive value for shareholders and to demonstrate our commitment to our customers, communities and employees.”

CIT is committed to positioning the company to deliver long-term value for shareholders while maintaining a strong risk management culture. CIT’s strategic priorities to advance its transition to a leading national middle market bank include:

• Focusing on Core Commercial Businesses: Invest in growth and strengthen its capabilities with respect to its core commercial lending, leasing (including rail), and depository solutions for middle market customers, as well as:
  
  • Complete the separation of the Commercial Air business by the end of 2016; and
  • Complete the integration of OneWest Bank by year end.

• Improving Profitability and Returning Capital: Achieve a return on tangible common equity (ROTCE) of 10 percent by 2018 by executing on initiatives to:
  
  • Reduce operating expenses by $125 million by 2018;
  • Improve funding costs by growing its deposit base and transitioning the deposit mix to lower cost deposits;
  • Efficiently realize substantial cash flow and capital from deferred tax assets; and 
  • Return excess capital to shareholders, subject to regulatory approvals.

• Maintaining Strong Risk Management: The improvement in CIT’s credit ratings reflects the strength of its franchises, strong liquidity and capital positions, and the expansion and diversification of deposit funding. Additionally:
  
  • CIT has improved its risk profile and strengthened its underwriting standards to focus on appropriate risk adjusted returns throughout cycles and to leverage its expertise as an asset-backed lender; and
  • Going forward, the company will continue to ensure it maintains high risk management standards and evolves with industry requirements.

Ms. Alemany concluded, “Our Board and management team are fully aligned with shareholders and are committed to thoughtfully considering their feedback into our ongoing decision-making. With our recent actions and the decisions we are announcing today, we are strengthening our culture of ownership, accountability and transparency at CIT. Our strategic plan of focusing on our core businesses and leveraging the strength of our franchises and risk management practices will maximize value for shareholders and position CIT as a leading national middle market bank.”