- A price target boost at RBC Capital for Buy-rated KeyCorp (KEY -3.9%) to $15 from $13 is of no help to the stock which suffers its 2nd consecutive big decline after earnings on Thursday morning.
- Among the issues (in addition to the broad market selloff) is some concern over a stall in progress on the efficiency ratio which in Q4 rose above the top end of the 60-65% target (earnings presentation slides)
- Acknowledging on the earnings call (transcript) all management has done to get down to this area, Mike Mayo reminds 65% is still a "really lousy" efficiency ratio (competitors are around 60%), and wonders where improvement is going to come from. "Point us in some direction, which business lines? Anything else we can sink our teeth into?"
- There's a "long list" of initiatives, says CFO Don Kimble. Among them is space in the bank's corporate center. Savings there could be $4M-$5M per year, but won't kick in until leases expire in 2015.
- "Strong balance sheet growth isn't necessarily translating into top line revenue growth in this particular environment," says CEO Beth Mooney.
Expenses a concern for KeyCorp
Jan 24 2014, 11:55 ET