CIT comes home
In the game of banking, often the real competition is not other lenders, but your colleagues in different departments competing with you for capital. Many heads of business jet finance are at least as good at selling to management as they are at selling to clients. One valid argument is that if you do not offer business jet finance to clients they will go to another bank. This is particularly true in private banking.
But sometimes, your bank just changes strategy.
CIT Bank has just done this. After many years of financing business aircraft outside the US, the bank has changed its overall strategy. It now wants to focus on US deals as it tries to become a leading domestic middle-market bank. Although it is still open for US clients, CIT Business Aircraft Finance is now closed to international clients. The bank is also looking to sell or spin-off CIT Aerospace, its commercial aircraft leasing business.
This is a big loss to the international business jet market.
The bank had good leadership, a strong team and worked in a part of the market where there was demand for its products. Hopefully others institutions will help fill this. Global Jet Capital, Stonebriar and Arc & Co are flying the flag for non-bank financiers. Some banks, like the UK’s Lombard, have got a new mandate to grow. Bank of America, Investec and SG Equipment Finance, amongst others, are still very competitive in their key markets. But there is still room for new lenders (and this is something that will be covered at the EBACE transactions seminar).
Nature may abhor a vacuum, but banks tend to hunt in packs. Eight years on, there are still finance gaps that have not been filled since the Global Financial Crisis.
NOTE: The below originally appeared as the editorial in our Corporate Jet Investor One Minute Week newsletter. To find out more, and sign up for free, please click here.