New York-based CIT posted wider losses in its fourth quarter
results after putting aside more money for bad loans.
The company, which has been struggling to finance operations
during the credit crunch, posted a net loss attributable to common
stockholders of almost $204 million (€155 million), compared with a
loss of $130.8 million for the same period the year before.
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For the full year, net losses attributable to common
shareholders were more than $2.86 billion, compared with $111
million in 2007.
According to the company, the negative results were hampered by
higher provisions for credit losses, charges to write-off goodwill
and intangible assets in its European vendor finance business,
costs of becoming a bank holding company and continued compression
of interest margins.
CIT’s CEO Jeffrey Peek said results were “disappointing
overall”, but added that the company had been able to undertake a
“strategic transformation” in 2008.
He said: “We exited our consumer businesses, secured more than
$18 billion in liquidity, realigned our balance sheet to
dramatically improve regulatory capital ratios, and converted to a
bank holding company.”
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By GlobalDataCIT won approval at the end of last year to become a bank
holding company, which it sought in order to obtain a capital
injection from the US Treasury.
It raised more than $4 billion of regulatory capital from the US
government’s Troubled Assets Relief Program (TARP), notes exchanges
and sale of common stock.
