RPT-KeyCorp sinks after raising loan loss forecast
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By Jonathan Stempel and Sweta Singh
BANGALORE May 28 (Reuters) - KeyCorp (KEY.N: Quotazione), a large U.S. Midwest regional bank, said mounting loan losses could cause net charge-offs to double from its prior forecast, causing its shares to drop as much as 11.1 percent.
In a filing late Tuesday with the U.S. Securities and Exchange Commission, the Cleveland-based bank projected full-year net charge-offs in the range of 1 percent to 1.3 percent, up from its prior forecast of 0.65 percent to 0.90 percent.
KeyCorp said net charge-offs in the second quarter and possibly the third quarter could be higher than the new range, citing exposure to residential homebuilders, and in its education and home improvement loan portfolios.
In morning trading, KeyCorp shares were down $2.17, or 9.9 percent, to $19.78, after earlier falling to $19.51.
KeyCorp spokesman William Murschel declined to immediately elaborate on the filing.
Many U.S. banks have struggled with mounting credit losses as the economy slowed and housing market slumped, making it more difficult for many borrowers to keep current on their debts.
Several analysts lowered their profit forecasts for KeyCorp, and some questioned whether the bank could sustain its $1.50 per share quarterly dividend. This equated to a 6.83 percent dividend yield as of Tuesday's market close. Continua...