Clearly, we've seen this movie before.
announced today that its losses attributable to common shareholders amounted to $390 million in the second quarter, or 68 cents per share, compared to a loss of $1.13 billion, or $2.70 per share, in the year-earlier period.
Still, analysts expected the bank to lose 41 cents per share in the quarter.
In a press release, KeyCorp pointed to an $850 million loan loss provision in the quarter, an uptick from $647 million in the year-earlier quarter, which exceeded net charge-offs by $311 million. At the end of the quarter, the bank group's reserve for loan losses ballooned to $2.5 billion, representing 3.53% of loans on its books -- which is up from $1.4 billion, or 1.87%, in the year-earlier period. KeyCorp's nonperforming loans represented 3.09% of its portfolio at the end of the quarter, which is up from 1.07% in the year-ago and from 2.36% sequentially.
"Our results continue to reflect the weak economic environment and the aggressive steps we've taken to address credit quality, strengthen our capital position and control costs as we manage through this difficult credit cycle," CEO Henry Meyer said.
In response to the federal government's stress test, the bank group raised more than $1.8 billion in new Tier I common equity during the quarter, though it plans to shore up capital further through an exchange offer for retail capital securities that commenced two weeks ago.
Because of cost-cutting efforts over the past 15 months, KeyCorp said it slashed 1,500 jobs, or 8% of its workforce, and lowered its personnel costs by 6%.
Shares in the company were down 4.6%, or 22 cents, at $4.60 just after the opening bell. Since the year began, KeyCorp shares are down nearly 47%.
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