Morningstar Rating

Stock Research and Analysis

by Stephen Ellis

Bulls Say

By refocusing on its community bank and building strong relationships, Key should be able to improve its credit quality and gather more deposits.
Key has relatively less exposure to interest rate fluctuations because 40% of revenue comes from fees. This should provide a more consistent income stream even during challenging credit times.
Key should have enough of a capital cushion to deal with loan losses and invest in expanding its community bank network. Read more 

Bears Say

A broader slowdown in the economy will hit Key's commercial and industrial portfolio, which makes up roughly 45% of total loans. Increasing loan losses derived from this portfolio will damp earnings.
Increased regulation and the continuing deflation of a decades-long debt bubble will result in low levels of profitability for the foreseeable future. Read more 

Management

We have mixed views of Key's management, which is why we assign it a standard stewardship rating. We think the firm's new strategy is very sensible and see it as a continuation of the bank's plan to disassociate itself from problem loans, which began   Read more 

Profile

With roughly $93 billion in assets and more than 1,000 branches, Ohio-based KeyCorp's community bank footprint spans 14 states. The Great Lakes and Northeast regions each   Read more 

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