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By Richa Naidu and Ramkumar Iyer
Oct 21 (Reuters) - CIT Group Inc said Chief Executive Officer John Thain, who was appointed to turn around the commercial lender after its bankruptcy, will retire in March and be replaced by veteran banking executive Ellen Alemany.
Thain, who headed Merrill Lynch before it was sold to Bank of America Corp at the height of the financial crisis, told Reuters his work at CIT is done after a series of asset sales, purchases, and shifts in the way the company funds itself.
"CIT had many things that were broken and needed to be fixed," Thain, 60, said in a telephone interview.
"What's left will be primarily a U.S.-based commercial bank, and that's what Ellen's expertise is," he said.
CIT filed for bankruptcy in late 2009 after losing access to funding in the bond markets during the financial crisis. Since Thain took the reins in February 2010, he has focused on reducing the company's reliance on bond market funding, wiping out more than $30 billion of high-cost debt, and increasing CIT's use of deposit funding.
In August 2015, CIT closed on its purchase of OneWest Bank, which brought the company more deposit funding.
CIT said on Wednesday it would explore strategic alternatives for its $10 billion commercial air unit and sell its Canadian and Chinese businesses to help with its focus on U.S. commercial banking.
Alemany, who will also be appointed vice chairman in November and is a former CEO of Royal Bank of Scotland Group Plc's Americas unit, has been a director at CIT since 2014.
"The potential sale of the aircraft leasing business and the China and Canada units would make CIT look more like a traditional U.S. bank holding company," Drexel Hamilton analyst David Hilder said.
CIT said Thain, who once served as Goldman Sachs Group Inc's chief operating officer, would retire as CEO on March 31 but stay on as chairman.
"I plan to go play on the beach in Los Angeles with my two-year-old grand daughter," Thain said.
Carol Hayles, currently the lender's corporate controller, will become chief financial officer in November, the company said.
Thain, who began his banking career in 1979, formerly headed the New York Stock Exchange as it recovered from the Richard Grasso pay scandal and engineered a series of mergers that shaped it into NYSE Euronext by 2007.
CIT shares closed down 0.7 percent at $39.88 on Wednesday. They were little changed after the bell. (Reporting by Richa Naidu and Ramkumar Iyer in Bengaluru, additional reporting by Dan Wilchins in New York; Editing by Savio D'Souza and Tom Brown)