CIT Group Inc (CIT.N) said Chief Executive Officer Jeffrey Peek plans to retire at the end of the year, as the commercial finance company struggles to avoid bankruptcy.

The company, which lends to about a million small and medium-sized businesses, said its board of directors is forming a search committee to oversee the recruitment process.

Peek has led CIT since 2003. He has been widely criticized for being slow to recognize the extent to which the credit crunch would stress the company's business model by lifting its borrowing costs.

The company is hoping to exchange its current debt for new debt and equity, in an effort to reduce its overall borrowings and strengthen its balance sheet. But the exchange is not going well, sources have told Reuters, and CIT is increasingly likely to file for bankruptcy protection.

CIT listed $71 billion of assets on its balance sheet as of the end of June.