KeyCorp (NYSE:KEY) posted second-quarter earnings on Tuesday that missed Wall Street expectations, even as revenue climbed 21% from the prior year. Shares dipped slightly, down 0.11% in premarket trading following the report.
The Cleveland-based bank recorded net income of $387 million, or $0.35 per diluted share—matching analysts’ EPS forecast, but not surpassing it. Total revenue for the quarter came in at $1.8 billion, meeting consensus estimates.
Revenue gains were supported by a 4% quarterly increase in net interest income and a 10% year-over-year rise in noninterest income. The net interest margin improved to 2.66%, up 8 basis points compared to Q1.
Commercial lending drove asset growth, with period-end commercial loans rising $1.6 billion sequentially. Year-to-date, commercial loan balances have expanded by $3.3 billion, or 5%. Credit quality also showed improvement, as net charge-offs declined 8% from the prior quarter.
“Our second quarter results demonstrate continued strong momentum,” said Chris Gorman, Chairman and CEO. “Revenue was up 21% year-over-year driven by our clearly defined net interest income tailwinds and 10% growth in noninterest income, while expenses grew 7%.”
The bank also saw strong performance in its capital markets business. Investment banking and debt placement fees surged 41.3% to $178 million, fueled by increased activity in syndications, commercial real estate, and equity issuances. Assets under management reached a record high of $64 billion.
KeyCorp left its quarterly dividend unchanged at $0.205 per share. Its Common Equity Tier 1 (CET1) capital ratio stood at 11.7% at quarter-end, signaling continued financial stability.
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