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CIT reports loss for Q4'16 due to goodwill write-down, restructuring charges

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CIT reports loss for Q4'16 due to goodwill write-down, restructuring charges

CIT Group Inc. reported fourth-quarter 2016 net loss of $1.15 billion, or a loss of $5.71 per share, compared with net income of $144.5 million, or 72 cents per share, in the year-ago quarter.

The company posted a loss from continuing operations for the quarter of $424.2 million, or a loss of $2.10 per share, compared with income from continuing operations of $69.6 million, or 35 cents per share, in the prior-year period.

CIT Group said its fourth-quarter 2016 results were impacted by several items related to strategic initiatives, goodwill impairment, actions to simplify the company and progress on the resolution of legacy OneWest Bank matters. Continuing operations include an after-tax net charge of $544 million, or $2.69 per share, which includes a charge of $327 million, or $1.62 per share, related to non-cash goodwill impairment, a charge of $146 million, or 72 cents per share, related to the termination of its Canadian subsidiary's total return swap facility, and a charge of $17 million, or 8 cents per share, related to legacy OneWest Bank matters.

Fourth-quarter 2016 loss from discontinued operations, net of taxes, was $730.5 million, or a loss of $3.61 per share, compared with income from discontinued operations, net of taxes, of $74.9 million, or 37 cents per share, in the year-ago quarter. Discontinued operations include an after-tax net charge of $806 million, or $3.98 per share.

Total interest income for the quarter dropped year over year to $475.0 million from $494.0 million. Provision for credit losses was $36.7 million for the quarter, compared with $57.6 million in the prior-year quarter.

Total financing and leasing assets totaled $37.66 billion at Dec. 31, 2016, versus $39.43 billion at Dec. 31, 2015.

Net finance revenue was $422 million for the quarter, down from $441 million in the year-ago period. Net finance revenue as a percentage of average earnings assets, also known as net finance margin, was 3.59% for the 2016 fourth quarter, compared with 3.64% in the year-ago period.

For the full year 2016, the company reported a net loss of $860.9 million, or a loss of $4.27 per share, compared with net income of $1.06 billion, or $5.67 per share, in 2015.