CIT Group Inc. (CIT - Free Report) announced on Oct 3, 2016 that it has successfully completed the sale of its Canadian equipment finance and corporate finance businesses (CIT Canada) to Laurentian Bank of Canada.
The sale will lead to a transfer of nearly 135 employees of CIT Canada to Laurentian Bank. Within the bank, a new national subsidiary called LBC Capital Inc. will be created for its equipment financing activities. Also, this acquisition is part of its plan to increase the percentage of loans to business customers and expand its presence across Canada.
Credit Suisse Securities LLC advised CIT Group on the financials of the transaction.
Ellen R. Alemany, Chairwoman and Chief Executive Officer, CIT Group said, “We are pleased to have successfully completed this transaction.” She further added, “Since our strategic update in March, we have significantly improved our focus on our core businesses, and the completion of the sale of CIT Canada represents another important step toward becoming a leading national middle-market bank. We remain focused on executing on our strategic and financial initiatives to improve profitability, return excess capital to shareholders and maintain strong risk management.”
The announcement of the deal led to a rise in the share price of the company, which had been on a decline over the past year.
Sale of the Canadian business is in line with CIT Group’s strategic turnaround plan to focus on its core commercial franchises and exit the international businesses. Notably, in June, the company filed an initial Form 10 Registration statement with the U.S. Securities and Exchange Commission to separate its commercial aircraft leasing business, which is expected to be completed by the end of this year. Also, following the sale of its air division, the company expects to reduce operating expenses by $125 million by 2018.
Currently, CIT Group carries a Zacks Rank #2 (Buy).
Some other stocks in the finance space worth considering include Farmers Capital Bank Corporation (FFKT - Free Report) , Fidelity Southern Corporation (LION - Free Report) and Daiwa Securities Group Inc. (DSEEY - Free Report) .
Farmers Capital witnessed an upward earnings estimate revision of approximately 0.9% over the past 60 days. Its share price has gained 11.1% over the past three months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidelity Corporation also sports a Zacks Rank #1. Its earnings estimates have been relatively stable over the past 60 days and its share price is up 21.9% over a three month period.
Daiwa Securities witnessed an upward earnings estimate revision of approximately 17.6% over the past 60 days. Its share price has gained 9.6% over the past three months. It currently carries a Zacks Rank #2.
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