Jan 20 (Reuters) - KeyCorp beat Wall Street expectations for fourth-quarter profit on Tuesday, as the U.S. lender earned higher interest and investment banking fees.
Regional banks across the United States
are benefiting as easing interest rates and a resilient consumer base continue to support loan growth.
The Cleveland, Ohio-based lender posted adjusted income from continuing operations at $458 million, or 41 cents per share, for the quarter ended December 31. Analysts expected a profit of 39 cents per share, according to data compiled by LSEG.
KeyCorp's net interest income, the difference between what a lender earns off loans and pays out on deposits, jumped 15.3% to $1.22 billion during the period. The bank said the rise reflected lower deposit costs and reinvestment of maturing lower-yield instruments into higher-yielding ones.
The earnings come just over a month after activist investor HoldCo Asset Management launched a campaign to push KeyCorp to refrain from bank acquisitions, oust its CEO Chris Gorman and to deploy all excess capital toward buybacks.
Shortly after, Gorman emphasized at a conference the lender's plans to use its excess capital for share buybacks instead of acquisitions, in a notable departure from the recent wave of deals across smaller banks.
"Given our excess capital position and meaningful capital generation capabilities, we are well positioned to further increase our return of capital to our shareholders in 2026," Gorman said in a statement accompanying the results.
Investment banking and debt placement fees at KeyCorp rose 10% during the quarter, underscoring gains from a dealmaking resurgence propping up books across Wall Street.
"Investment banking and debt placement fees recorded the second-best annual performance in our history, and pipelines remain elevated," Gorman said.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Shilpi Majumdar)
