2023 Outlook Shows Net Interest Income Boom Over for KeyCorp After Fourth Quarter

No-moat-rated KeyCorp reported fourth-quarter earnings per share of $0.38, missing the FactSet consensus of $0.55 as well as our own estimate of $0.60. Top-line results weren’t far off from expectations, as total revenue came in at $1.9 billion, in line with the consensus estimate of $1.93 billion. The main driver of the miss was higher provisioning, which increased to $265 million in the quarter from $109 million last quarter. We wouldn’t read too much into this, as the timing of provisioning is difficult to predict and in this case is simply related to changing economic forecasts and trying to predict stress that hasn’t occurred yet. Net charge-offs, delinquencies, and nonperforming loans were all steady during the quarter.