KeyCorp 2Q profit soars as loan losses plummet

AP News
Posted: Jul 19, 2011 8:21 AM
KeyCorp 2Q profit soars as loan losses plummet

KeyCorp said Tuesday that its second-quarter earnings soared due to lower loan losses and expenses.

The Cleveland banking company also continued to benefit from improving asset quality.

Its shares rose 34 cents, or 4.4 percent, to $8.07 in premarket trading.

KeyCorp reported net income of $234 million, or 25 cents per share, after preferred dividends for the three months ended June 30, up from $29 million, or 3 cents per share, a year ago.

It says revenue fell 8.2 percent to $1.02 billion from $1.12 billion. Revenue fell the most from the segment that includes the corporate treasury, Key's main investing unit and various exit portfolios.

Analysts surveyed by FactSet were expecting earnings of 20 cents per share on revenue of $1.03 billion.

"Key's second quarter results represent another step forward for our company," Chairman and CEO Beth Mooney said in a statement. "Our results reflected continued improvement in credit quality, disciplined expense management and continued execution of our business plan.

Nonperforming assets declined $1.1 billion to $950 million and nonperforming loans were reduced by more than half. Net charge-offs sunk to $134 million, a $301 million decline from a year earlier.

Key said it was particularly encouraged by growth in commercial, financial and agricultural loans in the three months that ended in June. Key originated about $9.5 billion in new or renewed loans during the period.