CIT Group Inc., who has recently been making moves to simplify its operations and become a regional commercial banking institution, announced it will be selling Financial Freedom and the reverse mortgage portfolio to an unnamed buyer. Financial Freedom has been a part of CIT group since August 2015 as a discontinued operation when CIT acquired OneWest Bank.
Nearly $900 million in reverse mortgage whole loans, including real estate loans, are included in the deal as of June 30, 2017. Though the details of the deal were not disclosed, CIT expects it to close by mid-2018.
"Throughout this year we have made continued progress in transforming the company and applying our focus toward maximizing the potential of our commercial banking and deposit franchises, which are the core of our go-forward strategy," said Ellen R. Alemany, Chairwoman and CEO of CIT Group.
CIT Group filed for bankruptcy in 2009 but has been streamlining its operations in order to simplify and improve efficiency. To begin that process, CIT announced in June its plan to sell its European Rail business and then in April sold stakes in the joint ventures with Tokyo Century Corporation and devised its aircraft leasing business.
According to the report, since then, CIT Group has divested its Canadian, Brazilian, and Mexican businesses, among others. Due to the efforts the company has put in, analysts “seem to be bullish on the stock.”
“The company's to-be-reported quarter's earnings estimates have been revised 6.4 percent upward over the last 60 days,” the report said. “Nonetheless, investors look skeptical about CIT Group's prospects. Shares of the company have gained 34.3 percent in a year's time, outperforming 27.9 percent rally for the industry.”
To see the full report, click here.