CIT Group (NYSE:CIT) posted a $71 million loss during the second-quarter, worse than the $50 million loss it recorded during the same time last year.

EPS for the second quarter showed a loss of 35 cents, up from 25 cents last year, but less than the 57 cents expected by Wall Street analysts, Reuters noted.

Earnings were hit with charges relating to the retirement of $4.2 billion in debt. The company has $4 billion in remaining high-interest debt.

CIT Group shares jumped almost 5% in Monday afternoon trading as investors digested the results.

Excluding charges, pre-tax earnings rose to $245 million, up from $134 million in 2011.

The company set aside $9 million against possible credit losses, a sharp decline from $84 million set aside last year. Net charge-offs also fell from $55 million last year, to just $17 million during the second quarter.

The small business lender remains under Federal Reserve oversight since emerging from bankruptcy in 2009. It submitted a capital plan to the Federal Reserve this year requesting the loosening of that oversight and the ability to return capital to its shareholders, possibly as dividends.

The Federal Reserve has not ruled on the plan yet.

Under the leadership of former Merrill Lynch CEO John Thain, the bank has cut costs. It now operates an Internet-based bank that has amassed $10 billion in assets and $2 billion in deposits.