KeyCorp grows deposits and profit as funding costs ease
KeyCorp’s third-quarter income from continuing operations attributable to common shareholders rose to 537 million dollars. Revenue and net interest margin increased, while average deposit growth exceeded loan growth. Management linked the margin improvement partly to lower deposit costs and reinvestment of low-yielding securities. The bank also repurchased shares and reported lower credit losses.
Economics & Markets··Morning
Profit and deposits increase
KeyCorp, the US banking group, reported third-quarter income of 537 million dollars from continuing operations attributable to common shareholders. Average deposits increased by 3.6 billion dollars from the preceding quarter.[1], [2]
Income had been 454 million dollars a year earlier and 472 million dollars in the preceding quarter. Diluted earnings per share rose to 0.51 dollars from 0.41 dollars a year earlier and 0.44 dollars in the previous quarter. Total revenue reached 2.044 billion dollars, an increase of 8.4 per cent annually and 4.5 per cent sequentially.[1]
Lower deposit costs lift the interest margin
The taxable-equivalent net interest margin reached 2.95 per cent, up 20 basis points from a year earlier and 6 basis points from the preceding quarter. Management linked the improvement partly to lower deposit costs, reinvestment of proceeds from low-yielding securities and a greater share of commercial and industrial loans. Net interest income increased from 1.184 billion dollars a year earlier to 1.300 billion dollars. The taxable-equivalent measure was 1.308 billion dollars.[1]
Average loans held for investment rose 1.5 billion dollars from the preceding quarter. Investment banking and debt placement fees increased to 214 million dollars, compared with 169 million dollars in the previous quarter and 184 million dollars a year earlier. Trust and investment services income was 165 million dollars.[1]
Share repurchases accompany lower credit losses
KeyCorp repurchased 320 million dollars of common shares. Its estimated core common equity capital ratio was 11.1 per cent, compared with 11.2 per cent in the preceding quarter and 11.8 per cent a year earlier. Management reported reductions in net charge-offs and nonperforming assets. Return on tangible common equity rose from 12.51 per cent a year earlier to 15.11 per cent; the preceding quarter’s figure was 12.89 per cent.[1]
