CIT spruces up brand in bid for more household deposits
In one of the online ads that CIT Group released in late November, as part a new brand campaign, a young woman sits alone in a canoe, staring out at a crystal blue mountain lake.
In another, a man wearing khakis and sneakers stares through a lens, looking out onto a field filled with wind turbines.
They’re not exactly the ads you would expect from a company that once financed commercial airliners and European rail cars. But after nearly three years under the direction of Chairwoman and CEO Ellen Alemany, CIT is a different kind of company.
With the launch of its new brand campaign — carrying the tagline “Bank like you” —CIT has taken a critical step forward in its ongoing effort to demystify the once-complex finance company, and make its brand more inviting and relatable, particularly to its growing base of retail customers.
“CIT has been undergoing a multiyear transformation of the company, and as part of that, we also started to think about our market presence,” said Gina Proia, CIT’s chief marketing and communications officer, in a recent interview.
Proia said CIT last updated its brand 12 years ago. Since then, of course, CIT has been through a lot. It filed for bankruptcy during the crisis, bought the OneWest retail franchise in California, and, most recently, has streamlined operations by divesting noncore business lines.
The latest brand campaign is a sign of its continued evolution. Under Alemany, CIT has embarked on a multiyear effort to transform what has historically been commercial finance company that relied heavily on brokered deposits into a more traditional deposit-funded bank. To that end, the ads are designed to appeal in large part to the group driving its torrid deposit growth: retail savers.
The campaign “shows how far along they are in the transition,” said Brian Klock, an analyst at Keefe, Bruyette & Woods.
In the fall of 2016, for instance, she arranged the sale of a $10 billion commercial airline division. She then shed a rail business in Europe and an equipment finance division in Canada. More recently, she ditched a troubled reverse-mortgage unit that CIT inherited through its 2015 purchase of OneWest in Pasadena, Calif.
But the portfolio sales have in some ways overshadowed an equally important shift to cheaper sources of deposits.
Brokered deposits — which as of Sep. 30 carried a rate of nearly 3% — made up about 10% of total deposits at the end of the third quarter, down from 15% a year earlier.
Meanwhile, online deposits — which carry rates of just under 2% — accounted for nearly half of CIT’s deposits of Sept. 30, compared to 37% a year ago.
“People forget that [CIT has] been somewhat innovative on that side,” said Klock. While regionals such as Citizens Financial Group have recently attracted attention for launching digital-only banks, CIT has been in that business for years, he said.
CIT has increased its online deposits, in part, by setting a highly competitive rate. As of Dec. 7, it offered savings rates of up to 2.25% for customers who deposit $100 per month, or maintain a balance of at least 25,000, according to the company website.
By comparison Marcus, the online bank from Goldman Sachs, offered a rate of 2.05%, while Ally Financial offered 2% on its online savings accounts.
Still, with the launch of its brand campaign, the $49.3 billion-asset CIT hopes to convey to consumers that it is more than just an online savings bank. For consumers, CIT offers mortgages, and for business owners — such as the man in the ad looking out at the field of wind turbines — CIT is emphasizing that it can provide the capital they need to grow.
“The new positioning puts our customers and their goals front and center,” Alemany said in a Nov. 15 press release announcing the campaign. “Whether they are a business looking to finance needed equipment for their growth or a personal saver looking to expand their banking strategy, CIT has the expertise to get them there.”
CIT declined to share the cost of the rebranding effort. Most of the advertisements have been placed in digital channels, according to Proia.
Less prominent in the rebranding campaign, however, is the company’s work with larger corporate customers, through commercial financing and real estate lending, which account for about a third of company’s loan book.
Commercial deposits, notably, have fallen sharply over the past year, plunging 45%, to $1.9 billion. They now accounting for just 6% of total deposits, down from 9% at the end of last year’s third quarter.
One reason why is that, outside of California, where CIT operates OneWest, the company doesn’t have an extensive branch network where commercial customers can go for advice, or obtain treasury management products, according to Klock.
With the recent hiring of former Santander executive Robert Rubino as president and head of commercial lending, however, there are signs that commercial banking could be a bigger focus in the near future.
In the meantime, though, the company is just trying to convey a simple message.
“CIT is a bank, and we put our customers first,” Proia said.