Marshall & Ilsley profit up 16 pct, bad loans rise
(Adds details throughout)
NEW YORK, July 18 (Reuters) - Marshall & Ilsley Corp. (MI.N), Wisconsin's largest bank, on Wednesday said second-quarter profit rose 16 percent, as growth in fee income offset an increase in loan losses, which more than doubled.
Net income for the Milwaukee-based company rose to $220.3 million, or 83 cents per share, from $190.5 million, or 74 cents, a year earlier. Core operating income rose 9 percent to $222.6 million, or 84 cents per share.
Analysts on average forecast profit of 85 cents per share, according to Reuters Estimates.
Results included a $19 million gain from selling shares of credit card company MasterCard Inc. (MA.N)
Marshall & Ilsley, however, set aside $26 million for credit losses, up from $11.1 million a year earlier, while net charge-offs rose to $23.6 million from $9.9 million.
"Results reflect the challenging operating environment that confronts domestic banks," Chief Financial Officer Greg Smith said in a statement.
Fee income benefited from several acquisitions by the company's Metavante Corp. financial technology unit, which offers processing services. Noninterest revenue rose 11 percent to $537 million, while lending income rose 5 percent to $402.9 million. Expenses also rose 5 percent, to $574 million.
Marshall & Ilsley has said it plans in the fourth quarter to separate Metavante in a transaction valuing the unit at $4.25 billion, including debt. Private equity firm Warburg Pincus would invest $625 million for a 25 percent stake and the bank's shareholders would hold the remainder.
Marshall & Ilsley has more than 300 banking offices in several states, including 192 in Wisconsin, and $58.3 billion of assets.
The bank's shares closed Tuesday at $46.76 on the New York Stock Exchange. The shares are down 3 percent this year, compared with a 2 percent decline in the Philadelphia KBW Bank Index .BKX.
((Reporting by Jonathan Stempel Editing by Mark Porter; Reuters Messaging: jon.stempel.reuters.com@reuters.net, 646 223 6317)) Keywords: MARSHALLILSLEY RESULTS/
(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN18356082
