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Michael.Thompson


KeyCorp's Strategic Growth Initiatives and Financial Performance Highlights

2024-07-21

KeyCorp, a prominent financial services company, convened its Second Quarter 2024 Earnings Conference Call, during which key executives Brian Mauney, Christopher Gorman, and Clark Khayat shared valuable insights into the company's performance and strategic endeavors.

In the second quarter of 2024, KeyCorp announced earnings of $237 million, equivalent to $0.25 per share. The revenue remained steady compared to the previous year but exhibited a sequential increase of $0.05. Notably, deposits experienced a 1% sequential growth, with client deposits rising by 5% year-over-year and consumer relationship households increasing by 3.3% annualized year-to-date. The company successfully onboarded over 31,000 households and acquired $2.9 billion in new household assets, elevating the total assets under management to $57.6 billion.

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KeyCorp made significant strides in its wealth management division by targeting mass affluent prospects and achieving a 9% year-over-year growth in commercial deposits. The company strategically focused on sectors such as healthcare, real estate, and technology to capitalize on substantial deposit opportunities. Despite subdued loan demand, KeyCorp's common equity Tier 1 ratio improved to 10.5% in the current quarter, with a positive preliminary stress capital buffer as indicated by the Fed's stress test.

In terms of noninterest income, KeyCorp witnessed growth in trust and investment services, commercial mortgage servicing fees, and investment banking activities. The credit quality remained robust, with net charge-offs totaling $91 million and outperforming loans increasing by 8% sequentially. The company's capital position also strengthened, with the CET1 ratio climbing to 10.5% and the tangible common equity ratio to 5.2%.

Looking towards the future, KeyCorp aims to seize the remaining annualized net interest income opportunity, effectively manage deposit costs, and drive loan growth through diverse initiatives. The company's strategic focus lies in expanding its mass affluent business, optimizing funding strategies, and bolstering its capital position to adeptly navigate market challenges.

Key executives underscored the significance of strategic investments in technology, talent, and key business segments to fuel growth in 2025. They emphasized the importance of maintaining a robust balance sheet, prudent expense management, and strategic capital redeployment to sustain performance and competitiveness in the market.

In conclusion, KeyCorp's Second Quarter 2024 Earnings Conference Call offered valuable insights into the company's financial performance, strategic direction, and future outlook. By prioritizing key growth drivers, risk management, and seizing opportunities, KeyCorp is committed to delivering value to its stakeholders and upholding its reputation as a trusted financial services provider in the industry.