Shares of large- and mid-size banks slumped on Wednesday after KeyCorp(KEY Quote) surprised Wall Street by warning of higher-than-expected loan losses.
Key shares slid more than 12% Wednesday after the bank said it expects to charge off more debt due to soured loans to homebuilders.
The Cleveland-based bank said in a Securities and Exchange Commission filing late Tuesday that it expects net loan charge-offs this year to be in the range of 1% to 1.30% of average loans, up from a previous estimate of 0.65% to 0.90% of loans. Key said in the filing that charge-offs in the second quarter and possibly the third quarter would run "above this range as [Key] deals aggressively with reducing exposures in the residential homebuilder portfolio." ...
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