CIT may look to buy retail bank - CEO

NEW YORK, Sept 8 (Reuters) - Commercial lender CIT Group(CIT.N) may consider buying a retail banking network in the next 18 months, CEO Jeffrey Peek said on Monday.

Speaking at a Lehman Brothers financial services conference, Peek said CIT was looking to see what it could do to expand deposit-taking beyond its existing CIT Bank, an industrial loan company in Salt Lake City, Utah.

"We think there are going to be various branch banking networks for sale over the next 18 months," Peek said.

"We would like to see what it takes for us to have the opportunity to expand our deposit taking."

CIT has struggled to raise capital and pay off debt this year and it has been looking to restore its credit rating.

The company secured $3 billion in financing from Goldman Sachs (GS.N) in June, however, and Peek said at the conference that CIT was no longer considering selling its railcar leasing business, a profitable unit it had shopped when it was facing funding problems earlier in the year.

"We would like to have more deposit-taking capability as part of a more balanced (funding) model," he said.

CIT's bank has already increased deposits to just over $2 billion from around $300 million in early 2006 and it now funds 70 percent of its corporate finance business through deposits.

Peek would like this business to grow, so the company can rely less on volatile capital markets.

CIT's existing bank, because of its status as an industrial loan company, is restricted from certain retail banking businesses.

CIT shares closed 7.5 percent higher at $11.53 on Monday in a general upswing following the government's takeover of Fannie Mae (FNM.N) and Freddie Mac (FRE.N).

(Reporting by Elinor Comlay; Editing by Ted Kerr)