KeyCorp underperforms and turns to cost cutting
REGIONAL US bank KeyCorp fell to a worse-than-expected second-quarter loss of $390m, (£237m) or $0.68 per share, yesterday.
The figures represent a turnaround from the $1.13bn, or $2.70, lost in the same quarter of last year, but still underperformed an analysts’ consensus of a $0.41 per share loss.
Chief executive Henry Meyer said the results were down to the “weak economic environment and the aggressive steps we’ve taken to address credit quality, strengthen our capital position and control costs”.
The bank hiked loan loss reserves to $2.5bn in the quarter, compared to $1.4bn the previous year and suffered continuing deterioration in the quality of its loans.
Meyer said cost-cutting efforts, including 1,500 job cuts in five quarters, would help the bank save between $300m and $375m by 2012.
Keycorp finished up 7.05 per cent at $5.16.