Moody's on March 6 revised CIT Group Inc.'s ratings outlook to "positive" from "stable," in light of the company's decreased use of market funds and its "promising efforts" to improve deposit quality.
The company's market fund reliance dropped to 19% at the end of 2017, from 26% a year ago. The rating agency expects it to fall toward 15% over the next two years.
CIT has also cut back on brokered and time deposits, but may need to make "significant additional investments" for its deposit base to rival that of its regional banking peers.
The revised outlook, which also applies to the ratings of subsidiary CIT Bank NA, is based on the expectation that operating performance will be less volatile this year.
Moody's also affirmed both entities' ratings, including CIT's senior debt rating of Ba2 and the bank's issuer rating of Ba2 and short-term deposit rating of Baa2. The affirmation reflects CIT's "well-established competitive positioning" and "well-managed liquidity," among other factors.
