Morningstar Rating

Stock Research and Analysis

by Timothy Puls

Bulls Say

With a renewed focus on relationship banking, Key will continue to attract deposits to reduce its funding costs and maintain a steady flow of both loans and fee income.
Key has a variety of fee income businesses that generate a solid proportion of the bank's total revenues. This provides the bank with steady revenues despite challenging credit environments.
Key's capital levels are strong and allow the bank flexibility to simultaneously pursue attractive growth opportunities and increase returns to shareholders. Read more 

Bears Say

At 50% of total loans, Key is heavily weighted toward C&I lending. A broad economic slowdown could hit Key particularly hard, leading to increased loan losses that would hold down earnings.
Increased regulatory costs will prevent Key from improving operational efficiency and hold returns to below the bank's 10% estimated cost of equity.
Competitive pressures may encourage Key to take on excessive risk. Read more 

Management

In our view, Key’s management is a standard steward of capital. The bank extended beyond its expertise and footprint leading into the financial crisis that led to some heavy losses, but we give management credit for taking relatively quick action to   Read more 

Profile

With assets of $90 billion and over 1,000 banking locations, Ohio-based KeyCorp's bank footprint spans 14 states. Roughly 60% of the bank's locations and 70% of total deposits   Read more 

3 Banking Takeaways From the Quarter 
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