KeyCorp (KEY -0.60%) shares fell on Thursday as the nationwide banking group reported its Q1 of fiscal 2020 results.
For the quarter, the company booked $1.47 billion in revenue, which was nearly 4% lower on a year-over-year basis. That was in spite of loan balances that rose by over 7% to $96.2 billion, and deposits that increased almost 4% to $82.6 billion.
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Meanwhile, KeyCorp's net income fell sharply, dropping to $118 million ($0.12 per share), from Q1 2019's $386 million ($0.45). Much of this was due to a significant increase in provisioning for credit losses. This line item increased more than sixfold to $359 million.
The extra provisioning is coming in advance of loan defaults, an expected occurrence throughout the banking sector due to the economic damage caused by the SARS-CoV-2 coronavirus outbreak.
The company did manage to bring costs down, as it slimmed non-interest expenses by over 3% on a year-over-year basis.
"Key's results reflect the extraordinary events that have unfolded as a result of COVID-19 and the efforts to contain its spread," the company said in its press release detailing the results. "At Key, we stand with those we serve and as leaders we are focused on demonstrating the strength and resiliency that will carry our company and our country through this challenging period."
The bank didn't meet analyst expectations for Q1 profitability. On average, these prognosticators were modeling $0.18 per share for net profit.
KeyCorp stock fell by 5.5% on Thursday, in marked contrast to the gains enjoyed by the broader equity market on the day.
