KeyCorp profit rises on higher interest income

April 17 (Reuters) - KeyCorp KEY.N said on Thursday its first-quarter net profit doubled from a year ago, boosted by income from interest payments.

Multiple rate cuts at the end of last year by the Federal Reserve helped with normalization of deposit costs at banks like KeyCorp, translating to a rise in income generated from interests.

Net interest income (NII) — the difference between what banks earn on loans and pays out on deposits — grew 24.7% to $1.11 billion, helped by lower deposit costs.

That helped the bank post a net profit of $370 million, or 33 cents per share, in the three months ended March 31, compared with $183 million, or 20 cents per share, in the year-ago period.

Shares of the bank were up around 1% in trading before the bell.

KeyCorp's stock has lost about 17.9% so far in 2025, compared to a drop of 10.3% in the benchmark S&P 500 index .SPX in the same period.

Investment banking and debt placement fees at KeyCorp rose to $175 million from $170 million last year.

However, market volatility surrounding tariff uncertainty has dampened the outlook for investment banking, with bankers resorting to a wait-and-see approach.

In the first three months of 2025, U.S. M&A activity fell 13%, according to data from Dealogic.

KeyCorp maintained its earlier forecast of NII growth of roughly 20% in 2025. Analysts were expecting a 21% rise.

Shares of the bank have lost nearly 12.4% since Donald Trump's Liberation Day announcements on April 2.