CIT CEO John Thain to Retire

CIT Group Inc. said John Thain, the crisis-era leader of Merrill Lynch & Co., will retire as chief executive of the lender on March 31 as it continues its push to transition to a U.S. commercial bank.

The company, a lender to small and medium businesses, said it would explore options for its $10 billion commercial air business and look to sell its CIT Canada and CIT China businesses as part of that transition.

Mr. Thain, who will remain chairman, is to be succeeded by board member Ellen R. Alemany, who will become vice chairman Nov. 1 and CEO as of April 1. Ms. Alemany's background includes positions at the Royal Bank of Scotland Americas and Citigroup Inc.

Mr. Thain, a onetime mortgage-bond trader, has been around the block on Wall Street, having served as president of Goldman Sachs Group Inc. and CEO of the New York Stock Exchange. He was brought in as chairman and chief executive of Merrill Lynch during the financial crisis and left after it was forced into a merger with Bank of America Corp.

After the Merrill deal was announced, Mr. Thain encountered difficulties when it emerged that employees of the investment bank received bonuses despite the dire state of the financial system. Mr. Thain was ousted the following year after a flurry of reports about the bonuses and the executive's decision to redecorate his office.

In 2010 Mr. Thain joined CIT, a company that had filed for bankruptcy in 2009. He has been building out the firm's consumer and commercial businesses while shedding nonstrategic assets.

CIT earlier this year closed its $3.4 billion deal to buy IMB Holdco LLC, the parent company of OneWest Bank NA, part of Mr. Thain's bid to acquire a bank-branch network. One West was formerly IndyMac Bank, which failed in 2008 amid the mortgage crisis.

But CIT and Mr. Thain faced skepticism over that deal from critics of the banking industry who are pushing large banks to shrink and who said the U.S. didn't need another big bank. The deal, however, was ultimately approved by the Federal Reserve and Office of the Comptroller of the Currency.

Mr. Thain's retirement marks the latest executive departure at CIT. On Monday, CIT said Chief Financial Officer Scott T. Parker is leaving in November to become CFO of consumer-focused lender Springleaf Holdings Inc. Controller Carol Hayles will take his place.

By Josh Beckerman