KeyCorp, Fifth Third post fourth-quarter losses

1/22/2010

Two big banks with many branches in northwest Ohio yesterday reported smaller losses at the end of last year, while a third bank reported a higher profit.

KeyCorp of Cleveland said it lost $265 million in the fourth quarter, better than its $524 million loss a year earlier.

Fifth Third Bancorp of Cincinnati lost $160 million in the quarter, better than a $2.2 billion loss the year before.

PNC Financial Services, a Pittsburgh firm that owns National City Bank, said it had a $1.01 billion profit in the fourth quarter, compared with a $269 million loss for the period a year earlier.

Key, which operates KeyBank in 14 states, posted a seventh consecutive quarterly loss as borrowers struggled to repay debt. Its losses narrowed in the fourth quarter even though it set aside $756 million for bad loans. It set aside $551 million for bad loans for the year-ago quarter and $733 million for 2009's third quarter.

The bank said it had fourth-quarter revenues of $1.1 billion, helped by improved interest margins and fewer delinquencies. Industry analysts had expected a larger quarterly loss and lower revenues.

CEO Henry Meyer III said work over two years to strengthen capital and reserves had positioned the company "to emerge from this extraordinary period as a strong, competitive company." The company has yet to repay $2.5 billion in U.S. bailout funds.

Fifth Third Bank, which analysts had expected would have had a higher fourth-quarter loss, was stung during the housing crisis and stuck with bad loans.

CEO Kevin Kabat said loan charge-offs, or loans written off as not being repaid, were $708 million, $48 million less than in the third quarter.

Michigan and Florida have a disproportionate share of charge-offs, a bank official said.

For the year, Fifth Third reported a profit of $511 million, after a 2008 loss of $2.2 billion. It has branches in 12 states.

PNC had a better fourth-quarter profit and $5.1 billion in revenue. It set aside $1.05 billion to cover bad debts.

The bank, which has said it intends to repay $7.6 billion in bailout money over time, had a 2009 profit of $2.4 billion, up from $914 million in 2008.