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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
         (Mark One)
              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended SEPTEMBER 30, 1996
                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from _________to __________

                             Commission File Number
                                     1-1861

                          THE CIT GROUP HOLDINGS, INC
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                13-2994534
--------------------------------------------------------------------------------
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                  Identification No.)


    1211 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK              10036
--------------------------------------------------------------------------------
       (Address of principal executive offices)               (Zip Code)

                                 (212) 536-1950
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                      NONE
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                        Yes____X___        No______

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 1, 1996: 1,000 shares.

================================================================================

<PAGE>

                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES

                                   (UNAUDITED)

          TABLE OF CONTENTS                                               PAGE
                                                                          ----
PART I.  FINANCIAL INFORMATION

  Item 1.   Financial Statements
            Consolidated Balance Sheets - September 30, 1996 and
              December 31, 1995.                                            2
            Consolidated Income Statements for the three and nine
              month periods ended September 30, 1996 and 1995.              3
            Consolidated Statements of Changes in Stockholders' Equity for
              the nine month periods ended September 30, 1996 and 1995.     4
            Consolidated Statements of Cash Flows for the nine
              month periods ended September 30, 1996 and 1995.              5
            Note to Condensed Consolidated Financial Statements             6

  Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations                           6-18

PART II.  OTHER INFORMATION

  Item 6.   Exhibits and Reports on Form 8-K                                19

                          PART I. FINANCIAL INFORMATION

     Certain  information  and  footnote  disclosures  normally  included in the
consolidated financial statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations  of the  Securities  and Exchange  Commission.  It is suggested that
these condensed  consolidated  financial  statements be read in conjunction with
the consolidated financial statements and notes thereto included in the December
31, 1995 Annual Report on Form 10-K and the March 31, 1996  quarterly  report on
Form 10-Q for The CIT Group Holdings, Inc. (the "Corporation").

     The  Corporation  considers that all  adjustments  (all of which are normal
recurring accruals) necessary for a fair statement of the financial position and
results of  operations  for these periods have been made;  however,  results for
such interim periods are subject to year-end audit adjustments. Results for such
interim periods are not necessarily indicative of results for a full year.

                                       -1-

<PAGE>

                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              (AMOUNTS IN MILLIONS)

                                                 SEPTEMBER 30,     DECEMBER 31,
                                                    1996               1995
                                                 -------------     ------------
ASSETS
FINANCING AND LEASING ASSETS
Loans
  Commercial                                      $10,526.2         $10,356.3
  Consumer                                          2,730.3           2,344.0
Lease receivables                                   3,303.7           3,095.2
                                                  ---------         ---------
  Finance receivables                              16,560.2          15,795.5
Reserve for credit losses                            (214.2)           (206.0)
                                                  ---------         ---------
  Net finance receivables                          16,346.0          15,589.5
Operating lease equipment, net                      1,365.0           1,113.0
CASH AND CASH EQUIVALENTS                             117.0             161.5
OTHER ASSETS                                          797.5             556.3
                                                  ---------         ---------
                                                 
  TOTAL ASSETS                                    $18,625.5         $17,420.3
                                                  =========         =========
                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY             
DEBT                                             
Commercial paper                                  $ 5,913.2         $ 6,105.6
Variable rate senior notes                          3,997.5           3,827.5
Fixed rate senior notes                             4,182.0           3,337.0
Subordinated fixed rate notes                         300.0             300.0
                                                  ---------         ---------
  Total debt                                       14,392.7          13,570.1
Credit balances of factoring clients                1,155.4             980.9
Accrued liabilities and payables                      539.2             485.9
Deferred Federal income taxes                         506.8             469.2
                                                  ---------         ---------
  Total liabilities                                16,594.1          15,506.1
                                                 
STOCKHOLDERS' EQUITY                             
Common stock - authorized, issued                
 and outstanding - 1,000 shares                       250.0             250.0
Paid-in capital                                       408.3             408.3
Retained earnings                                   1,373.1           1,255.9
                                                  ---------         ---------
  Total stockholders' equity                        2,031.4           1,914.2
                                                  ---------         ---------
                                                 
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $18,625.5         $17,420.3
                                                  =========         =========
                                              
                                       -2-

<PAGE>

                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
                          (DOLLAR AMOUNTS IN MILLIONS)

                                      THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,        SEPTEMBER 30,
                                      ------------------  --------------------
                                        1996     1995       1996        1995
                                        ----     ----       ----        ----
Finance income                         $415.8   $388.8    $1,222.3    $1,133.0
Interest expense                        214.4    210.0       628.2       618.2
                                       ------   ------    --------    --------
  Net finance income                    201.4    178.8       594.1       514.8
Fees and other income                    50.9     47.8       176.8       133.1
                                       ------   ------    --------    --------
  Operating revenue                     252.3    226.6       770.9       647.9
                                       ------   ------    --------    --------
Salaries and general operating
  expenses                               97.9     85.9       291.4       253.0
Provision for credit losses              24.2     24.0        78.6        67.2
Depreciation on operating lease
  equipment                              28.0     21.4        84.3        56.2
                                       ------   ------    --------    --------
  Operating expenses                    150.1    131.3       454.3       376.4
                                       ------   ------    --------    --------
  Income before provision for
    income taxes                        102.2     95.3       316.6       271.5
Provision for income taxes               37.1     36.8       119.3       103.7
                                       ------   ------    --------    --------
  Net income                           $ 65.1   $ 58.5    $  197.3    $  167.8
                                       ======   ======    ========    ========
Ratio of earnings to fixed charges       --       --          1.50        1.43

                                       -3-

<PAGE>

                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                              (AMOUNTS IN MILLIONS)


                                              NINE MONTHS ENDED
                                                SEPTEMBER 30,
                                           ------------------------
                                             1996            1995
                                             ----            ----
Balance, January 1                         $1,914.2        $1,793.0
Net income                                    197.3           167.8
Dividends paid                                (80.1)          (83.8)
                                           --------        --------

Balance, September 30                      $2,031.4        $1,877.0
                                           ========        ========

                                       -4-

<PAGE>



                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (AMOUNTS IN MILLIONS)

                                                           NINE MONTHS ENDED
                                                             SEPTEMBER 30,
                                                        ----------------------
                                                           1996        1995
                                                           ----        ----
CASH FLOWS FROM OPERATIONS
Net income                                              $   197.3    $   167.8
Adjustments to reconcile net income to net cash
 flows from operations:
 Provision for credit losses                                 78.6         67.2
 Depreciation and amortization                               97.8         62.6
 Provision for deferred Federal income taxes                 37.6         15.0
 Gains on asset and receivable sales                        (55.3)       (25.4)
 Increase in accrued liabilities and payables                34.1        139.1
 Increase in other assets                                   (44.8)       (16.4)
 Other                                                      (17.6)       (16.4)
                                                        ---------    ---------
  Net cash flows provided by operations                     327.7        393.5
                                                        ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Loans extended                                          (22,601.1)   (22,824.8)
Collections on loans                                     21,645.9     21,207.3
Purchases of assets to be leased                         (1,093.1)      (611.9)
Collections on lease receivables                            593.9        589.2
Net (increase) decrease in short-term factoring
  receivables                                              (127.1)        12.5
Proceeds from asset and receivable sales                    691.3        602.5
Proceeds from sales of assets received in
 satisfaction of loans                                       56.0         20.8
Purchases of finance receivables portfolios                (164.5)       (22.8)
Purchases of investment securities                          (18.1)        (8.9)
Other                                                       (21.4)       (30.2)
                                                        ---------    ---------
  Net cash flows used for investing activities           (1,038.2)    (1,066.3)
                                                        ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of variable and
 fixed rate notes                                         3,026.4      2,500.0
Repayments of variable and fixed rate notes              (2,011.4)    (1,115.6)
Net decrease in commercial paper                           (192.4)      (428.7)
Proceeds from nonrecourse leveraged lease debt               36.4          3.5
Repayments of nonrecourse leveraged lease debt             (112.9)       (99.5)
Cash dividends paid                                         (80.1)       (83.8)
                                                        ---------    ---------
  Net cash flows provided by financing activities           666.0        775.9
                                                        ---------    ---------
Net (decrease) increase in cash and cash equivalents        (44.5)       103.1
Cash and cash equivalents, beginning of period              161.5          6.6
                                                        ---------    ---------
Cash and cash equivalents, end of period                $   117.0    $   109.7
                                                        =========    =========
Supplemental disclosures
Interest paid                                           $   611.9    $   636.8
Federal and State and local taxes paid                  $    90.0    $    76.2
Noncash transfers of finance receivables to                          
  other assets                                          $   610.7    $   550.9
Noncash transfers of finance receivables to                          
  assets received in satisfaction of loans              $    88.3    $    17.7
Noncash transfers of assets received in                              
  satisfaction of loans to finance receivables          $    10.9    $    40.6
                                                                   
                                       -5-
                                                       
<PAGE>                                                                    
                                                    
                  THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
               NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In June 1996,  the  Financial  Accounting  Standards  Board  issued SFAS No. 125
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities".  This  statement is effective  for  transfers and servicing of
financial assets and extinguishment of liabilities  occurring after December 31,
1996 and  application is prospective.  Management  believes that the adoption of
this standard will not have a material effect on the Corporation's  consolidated
financial position or results of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

NET INCOME

Net income for the 1996 third quarter totaled $65.1 million, an increase of $6.6
million  (11.3%) from $58.5 million in 1995. For the nine months ended September
30, 1996, net income totaled a record $197.3 million  compared to $167.8 million
in 1995, an increase of 17.6%.  Return on average  financing and leasing  assets
for the quarter and nine months increased to 1.57% and 1.61%, respectively, from
1.50% and 1.47% for the same periods in 1995.  The  improvements  resulted  from
strong operating  revenues  including  increased  portfolio  spreads,  partially
offset by higher operating expenses.

                                       -6-

<PAGE>

FINANCE INCOME
A comparison of 1996 and 1995 net finance income is set forth below.
--------------------------------------------------------------------------------

                                                  Three Months Ended
                                       -----------------------------------------
                                            September 30,           Increase
                                       ---------------------   -----------------
                                          1996        1995      Amount   Percent
                                       ---------   ---------   --------  -------
                                               (Dollar Amounts in Millions)
Finance income                         $   415.8   $   388.8   $   27.0    6.9%
Interest expense                           214.4       210.0        4.4    2.1%
                                       ---------   ---------   --------   -----
Net finance income                     $   201.4   $   178.8   $   22.6   12.6%
                                       =========   =========   ========   =====
Average financing and leasing 
  assets (AEA)                         $16,636.6   $15,555.1   $1,081.5    7.0%
                                       =========   =========   ========   ===== 

Net finance income as a % of AEA           4.84%       4.60%
                                           =====       =====

                                                    Nine Months Ended
                                       -----------------------------------------
                                            September 30,           Increase
                                       ---------------------   -----------------
                                          1996        1995      Amount   Percent
                                       ---------   ---------   --------  -------
                                               (Dollar Amounts in Millions)
Finance income                         $ 1,222.3   $ 1,133.0   $   89.3    7.9%
Interest expense                           628.2       618.2       10.0    1.6%
                                       ---------   ---------   --------   -----
Net finance income                     $   594.1   $   514.8   $   79.3   15.4%
                                       =========   =========   ========   =====
Average financing and leasing 
  assets (AEA)                         $16,311.9   $15,200.0   $1,111.9    7.3%
                                       =========   =========   ========   =====

Net finance income as a % of AEA           4.86%       4.52%
                                           =====       =====

The improvements in net finance income reflect an increase in average  financing
and leasing assets,  a change in portfolio mix toward higher  yielding  consumer
finance   receivables,   lower  borrowing  costs  and  higher  fees  on  account
terminations.

                                       -7-

<PAGE>

A  comparative  analysis  of the  weighted  average  principal  outstanding  and
interest  rates on the  Corporation's  debt for the three and nine month periods
ended  September  30, 1996 and 1995,  before and after giving effect to interest
rate swaps, is shown in the following tables.
--------------------------------------------------------------------------------

                                   Three Months Ended September 30, 1996
                            --------------------------------------------------
                                Before Swaps                   After Swaps
                            -------------------            -------------------
                                       (Dollar Amounts in Millions)
Variable rate debt          $ 9,880.3     5.54%            $ 6,656.8     5.42%
Fixed rate debt               4,073.7     6.80%              7,297.2     6.67%
                            ---------                      ---------
Composite interest rate     $13,954.0     5.91%            $13,954.0     6.07%
                            =========                      =========

                                   Three Months Ended September 30, 1995
                            ----------------------------------------------------
                              Before Swaps                       After Swaps
                            ---------------------          ---------------------
                                       (Dollar Amounts in Millions)
Variable rate debt          $ 9,679.9     5.98%            $ 7,157.3     5.97%
Fixed rate debt               3,448.8     7.06%              5,971.4     6.76%
                            ---------                      ---------
Composite interest rate     $13,128.7     6.26%            $13,128.7     6.33%
                            =========                      =========
--------------------------------------------------------------------------------

                                   Nine Months Ended September 30, 1996
                            ----------------------------------------------------
                              Before Swaps                       After Swaps
                            ---------------------          ---------------------
                                       (Dollar Amounts in Millions)
Variable rate debt          $10,025.9     5.48%            $ 6,958.9     5.43%
Fixed rate debt               3,709.9     6.86%              6,776.9     6.69%
                            ---------                      ---------
Composite interest rate     $13,735.8     5.86%             13,735.8     6.05%
                            =========                      =========

                                   Nine Months Ended September 30, 1995
                            ----------------------------------------------------
                              Before Swaps                       After Swaps
                            ---------------------          ---------------------
                                       (Dollar Amounts in Millions)
Variable rate debt          $ 9,719.9     6.09%            $ 7,249.8     6.08%
Fixed rate debt               3,124.3     7.09%              5,594.4     6.76%
                            ---------                      ---------
Composite interest rate     $12,844.2     6.33%            $12,844.2     6.38%
                            =========                      =========
--------------------------------------------------------------------------------

The Corporation's  interest rate swaps principally convert floating rate debt to
fixed rate debt and  effectively  lower both the variable  and fixed rates.  The
weighted average composite rate increases,  however, because a larger proportion
of the  Corporation's  debt,  after  giving  effect to interest  rate swaps,  is
subject  to a fixed  rate.  The  Corporation  does  not  enter  into  derivative
financial instruments for trading or speculative purposes.

                                       -8-

<PAGE>

FEES AND OTHER INCOME

Fees and other income  totaled $50.9 million in the 1996 third quarter  compared
to $47.8  million in 1995,  primarily  the result of an  increase  in  factoring
commissions   and  in  fees   associated  with  the  servicing  of  third  party
receivables,  including those that have been securitized by the Corporation. For
the nine months ended  September 30, 1996,  fees and other income totaled $176.8
million,  an increase of $43.7  million over the  comparable  1995  period.  The
increase for the nine months includes the higher servicing fee income as well as
higher gains from the venture capital operation and other asset sales.

SALARIES AND GENERAL OPERATING EXPENSES

The following table sets forth the components of salaries and general  operating
expenses.
                                                   Three Months Ended
                                       ----------------------------------------
                                         September 30,             Increase
                                       ---------------        -----------------
                                       1996       1995        Amount    Percent 
                                       ----       ----        ------    -------
                                              (Dollar Amounts in Millions)
Salaries and employee benefits         $57.8     $49.6         $ 8.2     16.5%
General operating expenses              40.1      36.3           3.8     10.5%
                                       -----     -----         -----     -----
                                       $97.9     $85.9         $12.0     14.0%
                                       =====     =====         =====     =====
                                                         
Percent to AEA                         2.35%     2.21%
                                       =====     ===== 
Percent to average managed assets      2.13%     2.08%
                                       =====     ===== 


                                                   Nine Months Ended
                                       ----------------------------------------
                                         September 30,             Increase
                                       ---------------        -----------------
                                       1996       1995        Amount    Percent 
                                       ----       ----        ------    -------
                                              (Dollar Amounts in Millions)
Salaries and employee benefits        $166.9     $145.5        $21.4     14.7%
General operating expenses             124.5      107.5         17.0     15.8%
                                       -----     ------        -----     ----- 
                                      $291.4     $253.0        $38.4     15.2%
                                       =====     ======        =====     =====

Percent to AEA                         2.38%      2.22%
                                       =====     ======
Percent to average managed assets      2.15%      2.10%
                                       =====     ======

                                       -9-

<PAGE>

The  increases  in  salaries  and  general  operating   expenses  are  primarily
attributable  to  developing  the Consumer  Finance  delivery  system as well as
portfolio  growth and the servicing of a higher managed asset portfolio in Sales
Financing.

PROVISION AND RESERVE FOR CREDIT LOSSES

The following table compares 1996 and 1995 provision for credit losses.
--------------------------------------------------------------------------------

                                            THREE MONTHS ENDED NINE MONTHS ENDE
                                                SEPTEMBER 30,    SEPTEMBER 30,
                                            ------------------ -----------------
                                                1996     1995    1996     1995
                                                ----     ----    ----     ----
                                                 (Dollar Amounts in Millions)
Net credit losses                             $ 22.3    $21.9    $71.4    $56.6
Provision for finance receivables increase       1.9      2.1      7.2     10.6
                                              ------    ------   -----    -----
Total provision for credit losses             $ 24.2    $ 24.0   $78.6     67.2
                                              ======     =====   =====    =====
Net credit losses as a percent (annualized)                              
 of average finance receivables                0.54%     0.57%   0.59%    0.50%
                                              ======     =====   =====    =====
                                                                        
Net credit losses were  essentially  unchanged for the third quarter compared to
the prior year period.  For the nine months of 1996,  the higher level of credit
losses  compared  to the same  period of 1995,  reflects  provisions  related to
certain  nonaccrual  loans  secured by  shipping  and cruise line  vessels.  The
reserve for credit  losses at September  30, 1996 was $214.2  million  (1.29% of
finance receivables) compared to $206.0 million (1.30%) at year-end 1995.

DEPRECIATION ON OPERATING LEASE EQUIPMENT

Depreciation  on operating lease equipment for the third quarter and nine months
of 1996 was $28.0 million and $84.3 million, respectively, up from $21.4 million
and $56.2  million for the same periods in 1995,  due to growth in the operating
lease portfolio.

                                      -10-

<PAGE>

INCOME TAXES

The effective  income tax rates for the 1996 and 1995 third  quarters were 36.3%
and 38.6%, respectively. The decrease was primarily due to lower state and local
income  taxes.  For the first nine months of 1996,  the  effective  tax rate was
37.7% compared with 38.2% in 1995.

FINANCING AND LEASING ASSETS
Financing  and  leasing  assets  (finance   receivables   plus  operating  lease
equipment)  grew $1.0 billion  (6.0%) from December 31, 1995 and $741.1  million
(4.3%) from June 30, 1996 to $17.9 billion at September 30, 1996. The changes in
financing  and  leasing  assets by  business  unit from  December  31,  1995 are
presented in the following table.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                          Change
                                        September 30, December 31,  ----------------      
                                           1996         1995        Amount   Percent
                                       ------------  -------------  ------   -------
                                                 (Dollar Amounts in Millions)
<S>                                      <C>          <C>           <C>          <C> 
Finance receivables
  Business Credit                        $ 1,541.5   $ 1,471.0     $   70.5      4.8%
  Capital Equipment Financing              4,272.9     4,548.7       (275.8)    (6.1)
  Credit Finance                             798.7       758.7         40.0      5.3
  Industrial Financing                     5,250.8     4,929.9        320.9      6.5
  Commercial Services                      1,966.0     1,743.3        222.7     12.8
  Consumer Finance                         1,474.2     1,039.0        435.2     41.9
  Sales Financing                          1,256.1     1,304.9        (48.8)    (3.7)
                                         ---------   ---------     --------     ----    
    Total finance receivables             16,560.2    15,795.5        764.7      4.8
                                         ---------   ---------     --------      ---     
                                                                   
Operating lease equipment                                          
  Capital Equipment Financing                991.6       750.0        241.6     32.2
  Industrial Financing                       373.4       363.0         10.4      2.9
                                         ---------   ---------     --------      ---     
    Total operating lease equipment        1,365.0     1,113.0        252.0     22.6
                                         ---------   ---------     --------      ---     
    Total financing and leasing assets   $17,925.2   $16,908.5     $1,016.7      6.0%
                                         =========   =========     ========      === 
</TABLE>
                                      -11-

<PAGE>

A  discussion  of the changes in finance  receivables  from December 31, 1995 is
   presented  below.  

  o  Business Credit - Revolving and term loans, including  debtor-in-possession
     and workout  financing,  for medium and larger-sized  companies  secured by
     accounts receivable, inventory and fixed assets.
  
     Finance  receivables  increased $70.5 million  (4.8%).  Strong new business
     originations  of  $529  million  were  offset  by  syndications  as well as
     liquidations resulting from a highly competitive financing marketplace.
  
  o  Capital Equipment  Financing - Customized  secured equipment  financing and
     leasing of major capital equipment for medium and larger-sized companies.
  
     The decline in finance  receivables of $275.8  million (6.1%)  reflects new
     business  originations of $671 million,  offset by liquidations and the net
     transfer  of $65.8  million of finance  receivables  to assets  received in
     satisfaction of loans.
  
  o  Credit Finance - Revolving and term loans,  including  restructurings,  for
     small and medium-sized companies secured by accounts receivable,  inventory
     and fixed assets.
  
     Finance receivables  increased $40.0 million (5.3%) from December 31, 1995,
     reflecting  new  business   originations   of  $167  million,   reduced  by
     liquidations.
  
  o  Industrial   Financing  -  Secured  equipment  financing  and  leasing  for
     medium-sized companies, including dealer and manufacturer financing.
  
     Finance  receivables  increased by $320.9  million (6.5%) from December 31,
     1995,   reflecting  strong  new  business  originations  of  $2.0  billion,
     partially offset by liquidations.
  
  o  Commercial  Services - Factoring of accounts  receivable,  including credit
     protection,  bookkeeping and collection activities,  and revolving and term
     loans.
  
     The increase of $222.7 million (12.8%) in finance  receivables  during 1996
     reflects seasonal trends.  Third quarter growth in factoring volume of 9.0%
     over the prior year  period  also  contributed  to the  increase in finance
     receivables.
                                      -12-

<PAGE>

  o  Consumer   Finance  -  Loans  secured  by  first  or  second  mortgages  on
     residential real estate and home equity lines of credit  generated  through
     brokers and direct marketing.
  
     Finance  receivables  increased  $435.2  million  (41.9%) from December 31,
     1995,  reflecting  continued  emphasis on growth of this portfolio.  Strong
     loan originations during 1996 totaled $772 million.
  
  o  Sales  Financing  - Retail  secured  financing  of  recreational  vehicles,
     recreational   boats,   and   manufactured   housing  through  dealers  and
     manufacturers.
  
     Finance receivables  decreased $48.8 million (3.7%) from December 31, 1995.
     New business  volume  totaled $785  million,  principally  due to growth in
     recreational  boat  and  recreational  vehicle  volume,   offset  by  lower
     manufactured  housing  volume.  During the first nine months of 1996,  $454
     million of  recreational  vehicle  finance  receivables  were  securitized.
     Additionally,  at September 30, 1996, $260 million of recreational  vehicle
     and  recreational  boat volume was  classified  as assets held for sale for
     future  securitizations.   At  September  30,  1996,  Sales  Financing  was
     servicing  finance  receivables  of $1.2  billion  owned by  securitization
     trusts and $601 million owned by other institutions, which are not included
     in the preceding table.

Operating  lease  equipment  grew  $252.0  million  (22.6%)  principally  due to
increases in the commercial  aircraft and rail segments.  (See discussion in the
"Commercial Airline Industry" section which follows.) 

CONCENTRATIONS  

Commercial Airline Industry  

Commercial  airline  financing and leasing assets totaled $1.93 billion or 10.8%
of total  financing and leasing  assets at September  30, 1996,  compared to the
December 31, 1995 balance of $1.91 billion or 11.3%. The portfolio is secured by
commercial  aircraft and related  equipment.  Management  continues to limit the
growth in this portfolio relative to total financing and leasing assets.

                                      -13-

<PAGE>

The following table presents  information about the commercial  airline industry
portfolio.
--------------------------------------------------------------------------------
                                            September 30,       December 31,
                                                1996                1995
                                            -------------       -----------     
Finance Receivables                           (Dollar Amounts in Millions)
  Amount outstanding(a)                       $1,320.6            $1,412.2
  Number of obligors                                54                  51
Operating Leases                                               
  Net carrying value                          $  614.2            $  499.4
  Number of obligors                                30                  24
                                                               
Total                                         $1,934.8            $1,911.6
Number of obligors(b)                               73                  68
Number of aircraft                                 256                 266
                                                               
a Includes  accrued rents which were  classified as finance  receivables  in the
  Consolidated Balance Sheets. 
b Certain obligors have both finance receivable and
  operating lease transactions.
--------------------------------------------------------------------------------

Kiwi  International  Airlines  ("Kiwi") filed for protection under Chapter 11 of
the  Bankruptcy  Code  ("Code") on September  30, 1996 and grounded its fleet in
mid-October.  Under provisions of the Code, Kiwi has sixty days from the date of
filing to cure its payment defaults covering four aircraft under operating lease
agreements  with the  Corporation.  The aircraft are included in operating lease
equipment at September 30, 1996 in the amount of $31.7 million.  The above event
will not have a significant effect on the Corporation's  consolidated  financial
position or results of operations.

Highly Leveraged Transactions

Highly leveraged transactions ("HLTs") totaled $405.8 million (2.3% of financing
and leasing assets) at September 30, 1996 compared with $412.6 million (2.4%) at
December 31, 1995. The  Corporation's  HLT outstandings are generally secured by
collateral,  as  distinguished  from HLTs that rely  primarily on cash flow from
operations.  Unfunded commitments to lend in secured HLTs were $145.0 million at
September 30, 1996 compared with $220.4 million at December 31, 1995.

                                      -14-

<PAGE>

At September 30, 1996, the HLT portfolio consisted of 30 obligors in 12 industry
groups  located  throughout  the  United  States,   with  the  largest  regional
concentrations in the Southeast (31.7%) and the Northeast  (26.6%).  One account
with a balance of $17.7 million and $20.1  million was  classified as nonaccrual
at September 30, 1996 and December 31, 1995, respectively.

PAST DUE AND NONACCRUAL FINANCE RECEIVABLES
AND ASSETS RECEIVED IN SATISFACTION OF LOANS

Finance  receivables  past due 60 days or more declined to $248.0 million (1.50%
of finance  receivables)  at September 30, 1996 from $263.9  million  (1.67%) at
December 31, 1995. Past due finance  receivables on nonaccrual  status decreased
to $88.1  million  (0.53% of finance  receivables)  at  September  30, 1996 from
$139.5  million  (0.88%) at December 31, 1995. The decrease  primarily  reflects
transfers of cruise line vessels and oceangoing  carriers to assets  received in
satisfaction  of loans.  The  Corporation is in the process of  remarketing  the
cruise line vessels and  repossessing  and remarketing the remaining  oceangoing
carriers.

Assets received in satisfaction of loans increased to $66.9 million at September
30,  1996 from  $42.0  million  at  December  31,  1995,  due to the  previously
mentioned  transfers,  offset by the sale of an equity  interest  in a  building
supply retailer.

Total  nonperforming  assets,  comprised  of past  due  finance  receivables  on
nonaccrual  status and assets  received in  satisfaction  of loans  decreased to
$155.0  million at  September  30,  1996 from  $181.5  million at year end. As a
percentage of finance receivables,  total nonperforming assets declined to 0.94%
at September 30, 1996 from 1.15% at December 31, 1995.

                                      -15-

<PAGE>

LIQUIDITY

The  Corporation  manages  liquidity by  monitoring  the relative  maturities of
assets and  liabilities and by borrowing  funds,  primarily in the United States
money and capital  markets.  The  proceeds of such  borrowings  are used to fund
asset  growth  (including  the bulk  purchase  of  finance  receivables  and the
acquisition of other  finance-related  businesses) and to meet debt  obligations
and other commitments on a timely and cost-effective  basis. The primary sources
of  funding  are  commercial  paper  issuances,   proceeds  from  the  sales  of
medium-term notes and other debt securities, and securitizations.

During the first nine  months of 1996,  commercial  paper  borrowings  decreased
$192.4 million,  and the Corporation  issued $1.50 billion of variable rate term
debt and $1.53 billion of fixed rate term debt.  Repayments of term debt totaled
$2.01  billion.  At September 30, 1996,  $5.4 billion of registered but unissued
term debt securities remained available under shelf registration statements.

As part of the Corporation's continuing program of accessing both the public and
private asset backed  securitization  markets as an additional liquidity source,
the  Corporation  securitized  through the public  market  recreational  vehicle
finance  receivables  of $454  million  in the first  nine  months  of 1996.  At
September  30,  1996,  $211.8  million of  registered  but  unissued  securities
relating to the  Corporation's  asset  backed  securitization  program  remained
available under shelf registration statements.

                                      -16-

<PAGE>

At September  30, 1996,  commercial  paper  borrowings  were  supported by $5.18
billion of  committed  revolving  credit line  facilities,  representing  88% of
operating  commercial  paper  outstanding  (commercial  paper  outstanding  less
interest-bearing  deposits).  No  borrowings  have been made under  credit lines
supporting commercial paper since 1970.

CAPITALIZATION
The following table presents  information  regarding the  Corporation's  capital
structure.
--------------------------------------------------------------------------------
                                                September 30,      December 31,
                                                    1996               1995
                                                -------------      ------------
                                                      (Dollars in Millions)
Commercial Paper                                 $ 5,913.2          $ 6,105.6
Term Debt                                          8,479.5            7,464.5
Stockholders' Equity                               2,031.4            1,914.2
                                                 ---------          ---------
Total Capitalization                             $16,424.1          $15,484.3
                                                 =========          =========

Debt-to-equity ratio                             7.08 to 1          7.09 to 1

Commencing  with the 1996 second quarter  dividend,  the dividend  policy of the
Corporation  was changed to require the payment of dividends by the  Corporation
of  30%  of  net  operating  earnings  on a  quarterly  basis.  Previously,  the
Corporation's   dividend  policy  required  the  payment  of  dividends  by  the
Corporation of 50% of net operating earnings on a quarterly basis.

                                      -17-

<PAGE>

STATISTICAL DATA
The following  table  presents  components of net income as a percentage of AEA,
along with other selected financial data.
                                                           Nine Months Ended
                                                              September 30,
                                                          -------------------
                                                          1996           1995
                                                          ----           ----
Finance income*                                           9.94%          9.90%
Interest expense*                                         5.08           5.38
                                                          ----           ----
  Net finance income                                      4.86           4.52

Fees and other income                                     1.44           1.17
                                                          ----           ----
  Operating revenue                                       6.30           5.69
                                                          ----           ----
Salaries and general operating expenses                   2.38           2.22

Net credit losses**                                       0.59           0.50
Provision for finance receivables increase                0.06           0.09
                                                          ----           ----
  Provision for credit losses                             0.64           0.59
Depreciation on operating lease equipment                 0.69           0.49
                                                          ----           ----
  Operating expenses                                      3.71           3.30
                                                          ----           ----
Income before provision for income taxes                  2.59           2.39

Provision for income taxes                                0.98           0.92
                                                          ----           ----
  Net income                                              1.61%          1.47%
                                                          ====           ====

Average Financing and Leasing Assets (in millions)   $16,311.9      $15,200.0
                                                     =========      =========
Average Finance Receivables (in millions)            $16,090.3      $15,212.6
                                                     =========      =========

 *  Excludes interest income and interest expense relating to short-term 
    interest-bearing deposits.
**  Percentage to average finance receivables.

                                      -18-

<PAGE>

                           PART II. OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

           (a)  Exhibit 12 - Computation of Ratios of Earnings to Fixed Charges.

           (b)  Exhibit 27 - Financial Data Schedule

           (c)  A Form 8-K  report  dated  July 16,  1996 was  filed  with the
                Commission reporting the Corporation's announcement of results
                for the quarter ended June 30, 1996.

           (d)  A Form 8-K report  dated  October  17, 1996 was filed with the
                Commission reporting the Corporation's announcement of results
                for the quarter ended September 30, 1996.

                                      -19-

<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                       The CIT Group Holdings, Inc.
                                       ----------------------------
                                                       (Registrant)



                                       BY /s/ J. M. Leone
                                          ------------------------------
                                          J. M. Leone
                                          Executive Vice President and
                                          Chief Financial Officer
                                          (duly authorized and principal
                                          accounting officer)

DATE:  November 5, 1996

                                      -20-