Ellen Alemany Returns to Banking to Lead CIT After Thain

Register now

Veteran banker Ellen Alemany is coming out of retirement to head CIT Group after Wall Street icon John Thain steps down as chief executive next year.

Thain will be succeeded by Alemany, the former head of RBS Citizens and a CIT board member, on March 31, the New York-based CIT said Wednesday. Thain will remain chairman of the board and Alemany will become vice chairman, replacing Steven Mnuchin.

CIT, a commercial finance specialist, is seeking to transform itself into a commercial bank. Three months ago it acquired OneWest Bank, the Southern California retail bank built on the ashes of IndyMac, for $3.4 billion.

With about $65 billion of total assets (including $21.9 billion at its bank unit), CIT would be one of the largest banking companies overseen by a woman. The only other large U.S. banks with female CEOs are KeyCorp and Ally Bank.

Carol Hayles, CIT's corporate comptroller, will become chief financial officer, replacing Scott Parker, who resigned on Monday. Like Alemany, Hayles is a veteran of Citigroup.

CIT also announced plans to sell peripheral businesses to simplify its structure, less than three months after the close of its $3.4 billion deal for OneWest Bank.

The company will "explore alternatives" for its commercial airline business, which offers financing and leasing for commercial airlines and also owns a fleet of more than 350 aircraft that CIT leases out. CIT will also exit its international businesses by selling its units in China and Canada, it said Wednesday.

Alemany, 59, spent nearly six years as CEO of Citizens Financial Group, the U.S. subsidiary of Royal Bank of Scotland, before retiring in late 2013 and being succeeded by Bruce Van Saun.

Shortly after announcing her retirement, comments she made while accepting a lifetime achievement award at an American Banker event fueled speculation that her career in banking may not be over. Speculation increased when she joined CIT's board in early 2014.

Thain, 60, spent most of his career at Goldman Sachs before taking the top position at Merrill Lynch in late 2007, a role in which he would become a lightning rod for public anger during the financial crisis. Faced with massive losses as the financial crisis spread, in September 2008 Thain engineered the sale of the brokerage to Bank of America for nearly $40 billion, a 70% premium to Merrill's stock price.

Thain became a symbol of banker excess after news outlets described how he sought large bonuses for himself and other executives despite Merrill's disastrous financial performance, and spent company funds on costly renovations of the company's offices, including an infamous $35,000 gold commode.

Thain resigned in early 2009, reportedly after clashing with Ken Lewis, then the CEO of B of A, over Merrill's higher-than-expected losses and the billions in bonuses Thain had paid out before the deal closed.

Thain has since led a remarkable turnaround at CIT Group. He joined as CEO in 2010, shortly after the company emerged from bankruptcy, succeeding Peter Tobin. Under Thain's leadership CIT has returned to profitability, exited its regulatory orders and closed several acquisitions, the OneWest deal being the largest.

Thain "has been a pivotal leader during one of the most challenging times in CIT's more than 100 year history," said John Ryan, CIT's lead director, in the Wednesday news release. "Under his leadership he has overseen the successful corporate and financial restructuring of CIT."

Alemany will become CIT's vice chair on November 1. Mnuchin, current vice chair, will remain a board member, CIT said.

Mnuchin, a former Goldman Sachs partner, led a group of investors including John Paulson and George Soros to buy the failed IndyMac in 2008, which was re-launched as OneWest the next year. He joined CIT's board when the sale closed in early August.

For reprint and licensing requests for this article, click here.