Chairman and CEO, CIT Group
Three years into the turnaround plan at CIT Group, Ellen Alemany continues to remake the commercial finance company she inherited into more of a traditional bank.
CIT’s $1 billion deal to acquire Mutual of Omaha Bank, which was announced in August, is another step toward that goal.
The Nebraska bank was a logical fit for CIT, which has been looking to build its base of cheap deposits while also focusing on loans to midsize businesses. Mutual of Omaha Bank has $4.5 billion in low-cost deposits from homeowners associations and $3.9 billion in middle-market commercial loans.
“We’re going through a whole de-risking of the company,” Alemany said during a conference call shortly after the deal was announced, “and this gets us more into the traditional middle-market banking space.”
Alemany, who has been a commercial banking executive at Citigroup and chief executive at Citizens Financial Group, came out of an early retirement in 2016 to take the top job at CIT, where she had been a board member for two years.
The New York-based CIT was a hodgepodge of businesses that carried substantial risk; bondholders had been forced to save it from bankruptcy in 2009. Its 2015 acquisition of OneWest Bank gave it deposit funding, but
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Just before Alemany officially became the CEO, CIT announced a turnaround plan that included selling its $10 billion-asset aircraft leasing unit. As part of the plan, Alemany set an ambitious goal of achieving a 10% return on tangible common equity in three years.
She has since silenced the skeptics: In the last three quarters, CIT has posted a return on tangible common equity of between 9.67% and 10.34%.
After announcing the deal for Mutual of Omaha Bank, Alemany was asked about a potential sale of CIT. She indicated the deal should make CIT more attractive to a potential buyer, but her answer also suggested she remains focused on continuing to simplify the company.
“We felt this is a bird in hand. It was available. It really makes sense for us and helps us with these major strategic issues,” she said.
