Lower taxes and a recent acquisition of an investment banking firm contributed to a big jump in KeyCorp’s first-quarter profits.
The $137 billion-asset company said Thursday that its profit was $404 million, up roughly 36% from a year earlier, as its income tax bill fell roughly 34% to $62 million.
Revenue increased 3% to $1.6 billion as noninterest income rose 4% to $601 million from a year earlier. Key’s acquisition last fall of Cain Brothers, a boutique investment bank focused on the health care industry, was a big contributor to the more than 12% uptick in investment banking and debt placement fees, the Cleveland company said.
"Our fee-based businesses continue to demonstrate our ability to offer a full range of solutions to our clients, including off-balance-sheet financing alternatives that helped drive our investment banking and debt placement business," Chairman and CEO Beth Mooney said.
Net interest income totaled $952 million, a more than 2% increase from a year earlier. Commercial and industrial loans surged almost 7% to $42.7 billion, while other commercial loans dropped by more than 6% to $20.7 billion, and home equity loans fell by almost 6% to $11.9 billion.
Noninterest expenses rose about 8% to $1 billion as personnel costs climbed nearly 7% to $594 million, mainly from recent acquisitions, KeyCorp said. Nonpersonnel costs fell nearly 10%, to $412 million.