KeyCorp (KEY) reported higher third-quarter profit after recording a gain from the sale of its investment management and broker-dealer units.
The Cleveland company said Wednesday that it earned $266 million, up 24% from a year earlier. Earnings per share were 29 cents, beating analyst estimates collected by Bloomberg by six cents.
It completed its sale of Victory Capital Management and Victory Capital Advisers on July 31, which resulted in an after-tax gain of $92 million. Additional gains may be realized later, KeyCorp said. The company said in August that it expected to clear $100 million to $115 million on the sale.
Revenue declined almost 5%, to $1 billion, from a year earlier. Net interest income rose about 1%, to $584 million, as average total loans rose about 5%, to $53.3 billion. Noninterest income fell about 11%, to $459 million, primarily because of a $54 million gain associated with the redemption of trust-preferred securities a year earlier.
KeyCorp recorded $41 million, or three cents per share, in costs tied to its previously announced efficiency effort and a pension settlement charge. Last year the $90.7 billion-asset company announced a plan, which included eliminating branches, to improve its efficiency ratio to 60% to 65%.
KeyCorp also acquired a commercial mortgage servicing portfolio and special servicing business, adding more than $1 billion in low-cost funding through escrow deposit balances.