20 November 2009 (PublicWire) — New York-based bank holding firm, CIT Group Inc. (PinkSheets: CITGQ) said it conceded a 10th successive quarterly loss for the period stretching from July to September as the company failed to withstand the heat generated by the speculation surrounding its plans to file for bankruptcy. In any case the renowned lender to small and medium-sized enterprises proved the assumptions to be true on November 1, when it sensationally gave in to one of the biggest bailout transactions in U.S history after failing to ease its indebtedness.
CIT is yet to liven up from the nightmare of the credit crisis which translated to negative inconsistencies between its yielded revenues and costs incurred. By chance it befitted the politics of the Bush administration to advance the company $2.3 billion from the Troubled Asset Relief Program under the guise that it would be in the best interest of the taxpayers. However, the latest bankruptcy scenario will see to it that preferred shareholders such as the U.S government are wiped out.
During the third quarter ended September 30, CIT lost $1.07 billion ($2.74 per share), in relation to a smaller loss of $317.3 million ($1.11 per share) accounted for the same quarter a year ago. On the continuing operations front the company registered a loss of $1.03 billion ($2.74 per share), as compared to last year’s loss of $301 million ($1.13 per share).
Consolidated net revenue was not any better at $534.1 million, a drawback of $32.9 million over last year’s net revenue of $567 million. The deficit was partially a result of shockwaves from the $701.8 million that CIT had earmarked for credit losses over the third quarter, vis-a-vis $210.3 million set aside in that respect for the matching period of the previous year.
The lender disclosed assets valued at $69.19 billion and liabilities of approximately $64.1 billion. It intends to come forth from bankruptcy protection at the end of December under a pre-packaged restructuring arrangement that would give the unsecured debt holders nothing short of $0.70 on the dollar, as well as new common stock. CITGQ shares on the Pink Sheets closed 0.99 percent down to $0.02 on Tuesday.