KeyCorp's Q2 revenue hit by weaker-than-expected noninterest income, margin trails consensus

KeyCorp (KEY) was trading lower as Q2 revenue was hit by weaker-than-anticipated noninterest income, while margin came in below expectations.

Shares were 1.46% lower at $23.00 during pre-market trading on Tuesday.

Non-GAAP EPS of $0.44 beats by $0.02. Revenue of $1.96B (+6.5% Y/Y) misses by $10M.

Net interest income increased 9% year-over-year and 2% sequentially to $1.26B, in line with the Visible Alpha consensus of $1.26B.

Net interest margin increased 2 basis points sequentially to 2.89%, below the Visible Alpha consensus of 2.95%.

Noninterest income fell 2.4% sequentially and rose 2.3% year-over-year to $706M, modestly below the average analyst estimate of $706.06M.

Provision for credit losses fell to $92M during the quarter from $106M a quarter ago and $138M in the same period a year ago. The metric remained well below the average analyst estimate of $113.25M.

Book value per share stood at $16.19 at the end of the quarter, below the consensus estimate of $16.33.

"Our priority growth businesses—investment banking, commercial payments, and wealth management—are performing exceptionally well. Investment banking pipelines grew 9% sequentially. Commercial payments continued to deliver strong, double-digit fee growth year-over-year. Assets under management grew to a record $74B," said CEO Chris Gorman.

"I remain confident in our ability to generate a return on tangible common equity exceeding 15% by year-end 2027," said Gorman.

Earnings call to discuss quarterly results and currently anticipated earnings trends is scheduled for 9:00 AM ET today.