KeyCorp (KEY) shares traded lower Tuesday after the lender uncovered fraudulent activity associated within one of its business customers in its current quarter.
KeyCorp revealed that it is investigating the activity, which it believes was associated with one particular business customer of KeyBank National Association.
The bank holding company has launched an internal investigation into the matter to determine its exposure, which it currently estimates at $90 million. The Cleveland, Ohio-based bank said there could be an additional impact on its third-quarter earnings. Executives are working with law enforcement to determine additional details.
Shares of KeyCorp were down 1.14% at $17.38 in early trading Tuesday. The shares are down approximately 17% year-to-date.
U.S. banks began rolling out their quarterly earnings numbers this week, starting with Citigroup (C) , which Monday said that second-quarter profit rose 6.6% to $4.8 billion. JPMorgan (JPM) and Goldman Sachs (GS) both posted better-than-expected results on Tuesday before the market open.
Wall Street analysts have warned that U.S. banks could face a squeeze on their lending profits as the Federal Reserve moves toward a likely interest-rate cut later in July.