* Q3 oper EPS $0.37 vs est $0.26
* Investment banking revenue rose 26 pct
* Says to expand into Asia with a Hong Kong unit in early '10
Oct 29 (Reuters) - Boutique investment bank KBW Inc (KBW.N) posted a quarterly profit that topped market expectations, helped by robust revenue from principal transactions due to improved trading environment and higher investment banking revenue.
KBW is looking to expand its specialist business model into Asia with a subsidiary in Hong Kong, expected to be operational in early 2010.
The investment bank, which specializes in financial services sector, said third-quarter profit was $11.9 million, or 33 cents a share, compared with a loss of $23 million, or 75 cents a share, a year ago.
The company reported operating earnings of 37 cents a share.
Analysts on average were expecting earnings of 26 cents a share, excluding items, according to Thomson Reuters I/B/E/S.
Investment banking revenue rose 26 percent to $57.8 million, helped by a large number of equity capital markets transactions in the quarter.
Principal transactions gave net revenue of $23.6 million, compared with a loss of $53.8 million last year, due to improving fixed income revenue and market conditions, the company said.
Shares of the company closed at $29.98 Wednesday on the New York Stock Exchange. (Reporting by Archana Shankar in Bangalore; Editing by Ratul Ray Chaudhuri)
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