KeyCorp Q3 profit rises on higher fees, interest income

(Reuters) - KeyCorp posted a 9% rise in third-quarter adjusted profit on Thursday, as the lender raked in more from interest payments on loans and brought in higher underwriting fees.

Shares of the company, which have gained nearly 23% in 2024, rose 0.6% in trading before the bell.

Net interest income (NII) — the difference between what a bank earns on loans and pays out on deposits — rose 4.4% from a year earlier to $964 million in the quarter.

An increase in syndication, debt and equity underwriting helped the lender post a 21.3% rise in investment banking and debt placement fees from a year earlier to $171 million.

Some U.S. banks have shored up on loan-loss provisions as high interest rates, even after the U.S. Federal Reserve's 50-basis-points cut in September, increase the risk of borrowers defaulting on mortgages, credit cards and other debt.

KeyCorp's provision for credit losses jumped to $95 million in the quarter ended Sept. 30 from $81 million a year earlier.

Its net interest margin, a key measure for profitability, expanded to 2.17% in the third quarter compared with 2.01% a year earlier.

The lender's adjusted net income from continuing operations attributable to common shareholders rose to $290 million, or 30 cents per share, in the quarter from $266 million, or 29 cents per share, a year earlier.

(Reporting by Pritam Biswas in Bengaluru; Editing by Krishna Chandra Eluri)