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Arati Sontakay
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October 04, 2000
CIT AND FIRST UNION SIGN BANCO NACIONAL DE CREDITO AS PART OF JOINT TRADE FACTOR PROGRAM
First Union National Bank and CIT Commercial Services, under their Trade Factor Alliance, today announced a partnership with Banco Nacional de Credito (Bancredito). One of the largest banks in the Dominican Republic, Bancredito became the first bank in the country to utilize the Trade Factor Product, an international factoring product utilized by First Union correspondent banks around the world.
"The Dominican Republic is one of First Union's key markets and represents a wealth of opportunity for our product," said Fernando A. Melo Director of Trade Factor For First Union.
Under the program, CIT provides its credit guarantee to First Union's correspondent banks, assuming responsibility for the financial ability of its U.S. customers to pay. The first bank to sign on to this new program was Banco Financiera Hondurena S.A. (FICOHSA), which signed the agreement in March.
Factoring is an agreement between CIT and a company, in which CIT purchases accounts receivables and assumes responsibility for its customers' financial ability to pay. As a financial management tool, factoring can help companies of all sizes improve their cash flow, reduce operating costs, expand working capital financing and improve management information. Factoring enables companies to focus their attention on their core business rather than collecting receivables.
First Union (NYSE:FTU), with $258 billion in assets and stockholders' equity of $14 billion at June 30, 2000, is a leading provider of financial services to 15 million retail and corporate customers throughout the East Coast and the nation. The company operates full-service banking offices in 12 East Coast states and Washington, D.C., and full-service brokerage offices in 44 states and international offices worldwide. Online banking products and services can be accessed through www.firstunion.com.
CIT Commercial Services is the nation's largest provider of customized credit protection, accounts receivable management and lending services. It is a division of CIT Commercial Finance, which provides financing to companies in all stages of the business cycle. CIT Commercial Finance is one of six operating units of The CIT Group, Inc. (NYSE:CIT; TSE: CIT.U). Founded in 1908 and with over $50 billion in total managed assets, CIT is one of the nation's largest commercial and consumer finance organizations. For more information, visit the company's Web site at www.cit.com.
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