CIT Group reports $1.6 billion second-quarter loss

Lender continues to pursue restructuring

Heath E. Combs -- Furniture Today, August 18, 2009

NEW YORK — Troubled lender CIT Group has reported a $1.6 billion second quarter loss from continuing operations and still says that if it is unable to restructure, it may have to seek bankruptcy protection.

The $1.6 billion loss compares to $47.9 million in income from continuing operations in the comparable quarter last year. In this year's first half, the company reported a $1.96 billion loss from continuing operations, compared with a loss of $192.9 million in the same period in 2008.

Including discontinued operations, CIT had reported losses of $2.1 billion in the 2008 quarter and $2.3 billion in the 2008 half. That included losses from the company's sale of its home lending business.

CIT Group, which completed a tender offer last week for debt that matured on Monday, said in a filing with the Securities and Exchange Commission that it may pursue future similar debt exchange offers.

"The success of a restructuring through exchange offers will depend on the willingness of a significant majority of the existing security holders to agree to the exchange, and there can be no guarantee of success," the company said in the quarterly filing.

CIT said it doesn't expect to return to profitability this year. However, it reported that the trade finance segment, which factors receivables for the furniture industry, has performed relatively well despite its reliance on the weak retail and manufacturing industries.

It reported a net loss in the trade finance segment of $216.3 million in the second quarter, but that was after a $363.8 million charge to write off the value of goodwill and intangible assets in the segment.