Jeffrey M. Peek plans to step down as CIT Group Inc.'s chairman and chief executive at the yearend, underlining the uncertainty facing the commercial lender as it struggles to avert bankruptcy.
Peek, 62, joined CIT in 2003 after being denied the CEO job at Merrill Lynch & Co. His tenure at the top of CIT has not been smooth, especially since expanding the commercial lender into volatile subprime mortgages and student loans. The company has lost $5 billion in the last nine quarters as the financial crisis hurt its ability to lend and wiped out its balance sheet.
In a press release, Peek said, "Now is the appropriate time to focus on a transition of leadership." But there had been speculation he would lose his job ever since bondholders launched a plan to restructure about $31 billion in debt. As of Tuesday, this restructuring plan seemed destined to fail, and the company now teeters on the edge of seeking bankruptcy protection.
