CIT Group Inc. (CIT) is getting back into the maritime finance business, a niche that will complement its financial services in air and rail transportation, says EVP/CFO Scott Parker. He was speaking at the 33rd annual BancAnalysts Association of Boston Conference held at the Langham Hotel in Boston, Massachusetts.
The company recently acquired Direct Capital of Portsmouth, New Hampshire, and signed a definitive agreement to acquire OneWest Bank for $3.4 billion.
“We think the combination with OneWest is a good combination for us,” said Parker. “CIT Bank more than doubles in size, and adds over 70 branches in Los Angeles and $15 billion in deposits, including over $2 billion of commercial deposits.”
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Complementary to CIT’s North American Commercial Finance segment, OneWest’s cash management/payment solutions will become available to CIT’s existing clients, Parker said. Bolstered by the acquisitions, CIT is now re-entering the maritime financing business.
Parker termed the maritime investment as a “re-launching,” citing the opportunity created by problems with several European banks that specialized in the sector. Parker said CIT Group now has “about an $800 million portfolio” in the sector, describing it as “very diversified. We think there is plenty of opportunity to grow this business.”
In contrast, Parker said CIT Group is exiting what he termed “non-strategic portfolios.” Most of the variation in the company’s third quarter numbers were driven by the activity in the non-strategic portfolios, Parker said.
Revenue from transportation assets and international financing saw 22% year-over-year growth, Parker said, with North American commercial finance sporting 12% year-over-year growth. The transportation and international finance silos have a combined $19.1 billion in assets, split among aerospace, rail, maritime finance and international finance, Parker said.
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