KeyCorp Loses Net $438m, Raises Loan Loss Allowance
KeyCorp (KEY), parent company of Key Bank, recorded a net loss of $438m in Q309, compared to a $48m loss in Q308, as the bank increased its provision for loan losses, write-downs of certain real estate related investments, higher costs associated with other real estate owned (REO) assets, and the write-off of certain intangible assets. The bank took a $733m provision for loan losses, which exceeded net charge-offs by $146m. As of the end of Q309, Key Bank’s allowance for loan losses was $2.5bn, 4% of all loans, an increase from $1.4bn, or 1.9%, for the same time last year. “While our results continue to be impacted by the difficult operating environment, we believe the aggressive actions we’ve taken to address credit quality, strengthen capital and liquidity, and reshape our business mix position us to meet the challenges posed by the current environment and to emerge as a more competitive company when the economy rebounds,” CEO Henry Meyer III said in the company’s quarterly report. The $438m loss included $422m in operational losses and $16m in net losses from discontinued operations of government-guaranteed education loans. Loan losses for residential mortgages were $4m in Q309, steady from Q209 and up from $2m in Q308. Nonperforming residential mortgage assets were valued at $68m, up from $46m at the end of Q209 and $35m at Q308’s end. Non-interest income was impacted by $31m of realized and unrealized losses from the residential properties segment of the construction loan portfolio. Write to Austin Kilgore.