KeyCorp profit beats estimates, to cut costs
(Reuters) - KeyCorp (KEY.N) posted a lower quarterly profit but beat Wall Street estimates as credit quality continued to improve and the midwestern bank said it would look to cut costs.
Banks have had to focus on cost cuts to grow profits as new regulations written in the wake of the financial crisis hurt their ability to earn fees and rock-bottom interest rates crimp lending income.
KeyCorp is the latest bank to take aim at expenses to offset falling revenue. Bank of America (BAC.N) said on Wednesday it planned to cut $3 billion of costs by 2015.
KeyCorp said it was target ting between $150 million and $200 million of cost cuts by December 2013.
The bank said it would focus on branch rationalization, procurement, and sales and service productivity to realize the cuts.
It expects to consolidate as much as 5 percent of its over 1000 branches over the next 18 months, KeyCorp said on a post-earnings conference call.
Net income fell to $231 million, or 24 cents per share, for the second quarter, from $234 million, or 25 cents per share, a year earlier.
The lender earned 23 cents per share from continuing operations.
Analysts on average had expected KeyCorp to earn 18 cents per share, according to Thomson Reuters I/B/E/S.
Cleveland-based KeyCorp's shares were up 3 percent at $8.05 in morning trade on the New York Stock Exchange.
(Reporting by Aman Shah and Jochelle Mendonca in Bangalore; Editing by Supriya Kurane)