January 28, 2014 / 12:00 PM / in 4 years

UPDATE 1-CIT profit falls due to lower interest income, charge

Jan 28 (Reuters) - CIT Group Inc reported a 37 percent fall in its quarterly profit as the century-old small-business lender booked a charge and earned lower interest income.

The company booked a $45 million settlement charge in the quarter related to a dispute with former parent Tyco International Ltd.

Interest income fell 5 percent to $338 million.

CIT filed for bankruptcy in 2009 after a debt exchange offer and bailout talks failed. The bank, which emerged from Chapter 11 bankruptcy protection later that year, named former Merrill Lynch head John Thain as CEO in February 2010.

The lender’s net income fell to $129.9 million, or 65 cents per share, for the fourth quarter ended Dec. 30 from $206.8 million, or $1.03 per share, a year earlier.

Interest expense on long-term debt fell 27 percent to $238.2 million, while overall interest expense fell 22 percent to $286.7 million.

Expenses, excluding interest expense, rose 19 percent to $433.4 million.

Shares of CIT, which has a market value about $9.45 billion, closed at $47.22 on the New York Stock Exchange on Monday.

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