UPDATE 2-KeyCorp posts wider-than-expected loss on bad loans

* Q3 loss per share $0.52; Street view loss $0.41

* Loan loss reserves increased by $733 mln (Adds CEO comment, financial details)

NEW YORK Oct 21 (Reuters) - KeyCorp (KEY.N) posted a wider-than-expected quarterly loss on Wednesday as credit losses increased and it set aside more money to cover bad loans and wrote down real estate investments.

The Ohio-based regional bank posted a third-quarter net loss attributable to common shareholders of $438 million, or 52 cents per share, compared with a loss of $48 million, or 10 cents per share, a year earlier.

Analysts on average had forecast a loss of 41 cents per share, according to Thomson Reuters I/B/E/S.

Excluding the discontinuation of its education lending business, KeyCorp posted a loss from continuing operations of $422 million, or 50 cents per share, compared with a loss of $9 million, or 2 cents per share, a year earlier.

"Our results continue to be impacted by the difficult operating environment," Chief Executive Henry Meyer said in a statement.

Net loan charge-offs for the quarter rose to $587 million from $502 million in the second quarter and $233 million a year earlier.

Compared with the second quarter of 2009, net loan charge-offs in the commercial loan portfolio increased by $82 million.

KeyCorp increased its loan loss reserves by $733 million in the third quarter.

The company said deterioration in credit quality, particularly in the commercial real estate portfolio, resulted in higher levels of nonperforming loans and more reserve building.

In addition, KeyCorp recorded a $45 million charge to write off intangible assets. (Reporting by Juan Lagorio; editing by John Wallace)