KeyCorp in Cleveland reported higher quarterly profit after cutting costs and generating more fee income.
The $137.8 billion-asset company said its second-quarter net income rose 17% from a year earlier, to $467 million. Income taxes were down nearly 35%, to $103 million.
The results "were strong, driven by broad-based growth and momentum in our commercial and consumer businesses,” Beth Mooney, KeyCorp's chairman and CEO, said in a press release Thursday. “Continued loan growth, higher fees, and expense discipline drove positive operating leverage for the quarter.”
Total revenue rose slightly, to $1.6 billion.
Net interest income was flat, at $987 million. Average loans increased by more than 2%, to $88.6 billion, while the net interest margin narrowed by 11 basis points, to 3.19%.
Commercial and industrial loans increased by about 11%, to $45 billion. Home equity loans fell 7%, to $11.6 billion, while other commercial loans declined by more than 7%, to $20.4 billion.
Noninterest income rose by roughly 1%, to $660 million, as investment banking and debt placement fees jumped by almost 15%, to $155 million. KeyCorp bought Cain Brothers, a boutique investment bank that focuses on the health care industry, last fall. Trust and investment services income fell by more than 4%, to $128 million.
Noninterest expense fell nearly 1%, to $993 million. Personnel costs increased by 6%, to $586 million, while other operating expenses declined by nearly 8%, to $407 million. The cash efficiency ratio improved to 58.8% from 59.3% a year earlier.