KeyCorp Slides in New York Trading as Costs Exceed Guidance

Jan 23, 2014 4:24 pm ET

(Updates with closing share price in second paragraph.)

Jan. 23 (Bloomberg) -- KeyCorp, the top performer last year in the KBW Bank Index, fell the most in four months as fourth- quarter expenses exceeded the lender’s forecast.

KeyCorp declined 3.3 percent to $13.68 in New York, the most since Sept. 19. The Cleveland-based bank, which today posted a 21 percent profit increase, said noninterest expenses in the period were $712 million, surpassing its guidance of $680 million to $700 million, including one-time charges.

KeyCorp, led by Chief Executive Officer Beth E. Mooney, made improved efficiency a priority for 2013. The company incurred $24 million in costs related to its efficiency initiative and a pension settlement in the quarter, according to a statement. The firm forecast expenses to decline in 2014 by a single digit percentage from the previous year.

“If you look into the tone and tenor of the call, I think a lot of people were looking for more aggressive guidance than we ultimately gave them,” Mooney, 58, said in a phone interview, referring to today’s conference call with analysts. “I think they hoped for more.”

Net income rose to $229 million, or 26 cents a share, from $190 million, or 20 cents, a year earlier, according to the statement. Profit excluding one-time items was 28 cents a share, beating the 25-cent average estimate of 25 analysts surveyed by Bloomberg.

“We have been an out-performer now for some period of time and as we said today we are giving a little of that back,” Mooney said.

KeyCorp climbed 59 percent last year to lead the 24-company KBW Bank index, which advanced 35 percent.

--With assistance from Elizabeth Dexheimer in New York. Editors: Steven Crabill, Steve Dickson