Financial services giant KeyCorp unlocks its customers' monetary potential. With a focus on retail operations, flagship subsidiary KeyBank operates about 1,000 branches in more than a dozen states scattered throughout the Northeast, the Midwest, the Rocky Mountains, and the Pacific Northwest, including Alaska. Its operations are divided into two groups: Community banking offers traditional services such as deposits, loans, and financial planning; while national banking provides real estate capital, equipment financing, and capital markets services to large corporate clients nationwide.
Like many of its peers, KeyCorp was hit by the economic downturn, resulting in lower revenues and billions of dollars in losses. In response, the company more than doubled its allowance for loan losses from 2008 to 2009 and curbed risky lending. KeyCorp also wound down noncore businesses, such as hedge fund manager Austin Capital Management, to focus on consumer and corporate banking.
So far, the changes have served the company well, as its loan charge-offs have declined. Net income has dramatically increased and was up by more than 66% in 2011. The company returned to profitability in 2010 and remained profitable the following year. The improvements were due to lower credit costs and increased noninterest expense. Poor market conditions due to the slowly recovering economy created a lag in revenues in 2011.
KeyCorp's main goals are to grow profitability by increasing revenues and controlling costs. Much of the company's growth comes from attracting and retaining new customers. Those new customers often come by expanding the company's geographic footprint and improving products.
The company's community banking group continues to grow, despite the economic turmoil. In 2012 KeyCorp acquired nearly 40 branches in the Buffalo and Rochester, New York areas from First Niagara, which is divesting the branches in order to satisfy antitrust concerns related to its acquisition of nearly 200 branches in upstate New York from HSBC USA. KeyCorp has also been opening about 40 new branches a year and plans to continue to do so. – less