CIT Group Inc., the commercial lender run by John A. Thain, posted a surprise profit for its first full quarter since emerging from bankruptcy.
Thain told investors during a conference call Tuesday that credit losses are easing and that CIT Group is pushing ahead with plans to cut funding costs and use its banking unit to make more loans. The New York company reported a first-quarter profit of $97 million, or 49 cents a share.
"We're seeing encouraging signs on credit," Thain said during the call. Writeoffs of bad loans were "significantly lower" even before the impact of "fresh start" accounting used to emerge from bankruptcy, he said.
Thain has said CIT's recovery is being held back by the cost of its bond and bank loan financing, which carry interest rates as high as 13%. He is trying to persuade bank regulators to lift curbs on using federally insured deposits so he can reduce financing costs, and he is planning to pay down the most expensive debt.