CIT Group Inc.'s fourth-quarter 2016 results were significantly impacted by certain actions taken to transform the company and address legacy and operational issues, but Chairwoman and CEO Ellen Alemany said they were necessary to simplify and strengthen the company for the future.
CIT posted a fourth-quarter 2016 net loss of $1.15 billion, or $5.71 per share, and loss from continuing operations of $424.2 million, or $2.10 per share. 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.
"We understand that the quarter had a lot of complexity, but we remain optimistic about the potential in the core businesses and the ability to achieve the targets we have established in the strategic plan," Alemany said on a conference call to discuss earnings.
CIT Group is aiming to achieve $150 million in continuing operations expense savings by 2018. This includes $125 million in planned cost savings initiatives and $25 million of indirect costs associated with the sale of its commercial aircraft leasing business. The cost reduction strategy will focus on organization simplification, boosting third-party efficiencies, and technology and operational improvements.
The company achieved nearly one-third of the 2018 operating expense reduction goal in 2016 through organizational changes, Alemany noted.
The sale of CIT Group's commercial aircraft leasing business to Avolon Holdings Ltd is awaiting the receipt of Chinese regulatory approvals, as well as the approval of the shareholders of Avolon parent Bohai Capital Holding Co. Ltd., Alemany added.