KeyCorp (KEY) offset lower revenue with cost cutting last quarter.
The Cleveland company reported earnings of $236 million, up more than 18% from a year earlier. Earnings per share of 27 cents beat analysts' estimates polled by Bloomberg by three cents.
Noninterest expense fell almost 3%, to $662 million, from a year earlier. KeyCorp had embarked on an expense-cutting campaign that included closing some of its branches with the goal of getting its cash efficiency ratio to between 60% and 65%. That ratio was 64.9% in the quarter; lower ratios mean a bank is getting more efficient.
Revenue fell about 1%, to $1 billion, as net interest income declined about 3% primarily from lower asset yield and loan fees. Noninterest income rose about 2%, to $435 million, because of higher principal investing gains, growth in investment banking and debt placement fees and benefits from investments in commercial mortgage servicing.
Total average loans increased 4%, to $54.7 billion, year over year. The commercial, financial and agricultural portfolio climbed almost 9% while home equity loans increased 4%.
KeyCorp has assets of $90.8 billion.