KeyCorp Wyniki za I Kwartał – Najważniejsze Punkty

Strong quarter: KeyCorp reported Q1 EPS of $0.44 (up 33% YoY), revenue +10% YoY, and adjusted pre-provision net revenue rose $29 million sequentially as return on tangible common equity exceeded 13%.

Balance-sheet momentum: Net interest margin expanded 5 bps to 2.87% with management targeting an exit NIM of ~3.05%; commercial loans grew $3.3 billion sequentially while funding costs and interest-bearing deposit costs declined meaningfully.

Capital return and raised outlook: The bank repurchased nearly $400 million in the quarter and now expects at least $1.3 billion of buybacks in 2026, while upgrading guidance for net interest income growth to 9%–10% and lifting average loan growth targets.

KeyCorp (NYSE:KEY) executives highlighted what they described as a strong start to fiscal 2026, pointing to improved profitability, expanding margin, and broad-based commercial loan growth, while also outlining an increased share repurchase plan and updated full-year guidance.

Quarterly performance and profitability

Chairman and CEO Chris Gorman said the company’s “strong first quarter performance demonstrates disciplined execution and significant momentum.” KeyCorp reported first quarter earnings of $0.44 per share, which Gorman said was up 33% year-over-year, and return on tangible common equity exceeded 13% as the bank works toward a stated goal of “15%+” by the end of 2027.

Clark Khayat, Chief Financial Officer, said revenue rose 10% year-over-year while expenses increased 4%. He also noted that taxable-equivalent net interest income increased 11% year-over-year and was up 1% sequentially despite “two fewer days in the quarter and seasonally lower deposits.”

Gorman emphasized operating leverage, saying revenue grew “more than 2 times the rate of expenses,” while adjusted pre-provision net revenue increased by $29 million sequentially, marking the eighth consecutive quarter of adjusted PPNR growth.

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KeyCorp reported continued improvement in profitability drivers tied to the balance sheet. Gorman said net interest margin expanded 5 basis points sequentially to 2.87% and reiterated the company’s expectation to exceed 3% by year-end. Khayat later updated guidance to an exit net interest margin of approximately 3.05% on a stable earning asset base relative to the first quarter.

On lending, Gorman said commercial loan growth was “strong and broad-based,” rising $3.3 billion, or 4% sequentially on a period-end basis. Khayat added that average loans increased $1.4 billion sequentially and increased $2.6 billion on a period-end basis, with average C&I and CRE loans both up 3%. The company said growth was partly offset by the intentional runoff of “low-yielding consumer loans.”

Khayat noted that C&I line utilization increased 1% sequentially to 31.5% as loan growth outpaced commitments, and said the largest industry contributors to C&I growth were “financial services and utilities, power, and renewables.”

On funding, management described continued discipline on pricing and mix. Gorman said total funding costs declined 15 basis points in the quarter, with interest-bearing deposit costs decreasing 22 basis points, resulting in a “cumulative through the cycle down beta of 56%.” Khayat said average deposits decreased 2% sequentially due to typical seasonal patterns and the intentional runoff of $1.6 billion in higher-cost brokered CDs.

In response to analyst questions, Khayat said the company expects deposits to “trough kind of mid-May and then build up through the quarter,” adding that he would expect “ending balances June 30 to be higher” and to continue rising through the year. He also said that in a “no cuts” base case, deposit pricing should “sort of stabilize,” though competitive dynamics could change if loan growth accelerates materially.

Fee businesses, investment banking outlook, and servicing trends

Management pointed to strength in fee-based businesses as a key contributor to quarterly performance. Gorman said the company is gaining share across “wealth, investment banking, and commercial payments,” which collectively grew 12% from the prior year in the first quarter. Khayat said non-interest income increased 8% year-over-year, led by investment banking, trust and investment services, and growth in payments-related service charges.

KeyCorp reported investment banking and debt placement fees of $197 million, which Khayat said was a 13% year-over-year increase and a “new first quarter record,” driven by “M&A, equity issuance activity, and commercial mortgage debt placement activity.” However, both Gorman and Khayat said the company expects investment banking fees to decline in the second quarter from the record first quarter due to market conditions. Khayat said management is planning for second quarter investment banking fees in the $175 million to $180 million range, with upside if macro and geopolitical risks subside. Management reiterated an expectation for mid-single-digit investment banking fee growth for the full year.

Khayat also discussed commercial mortgage servicing fees, which were $62 million, down $14 million year-over-year, “largely driven by lower deposit placement fees” and resolutions in special servicing. At quarter end, he said KeyCorp was named primary or special servicer on approximately $720 billion of CRE loans, including about $265 billion of special servicing. Active special servicing third-party assets were $10 billion, about half in office, down from $12 billion a year earlier. The bank expects commercial mortgage servicing fees of about $50 million to $60 million per quarter for the remainder of the year.

Credit quality and private credit disclosures

Management characterized credit quality as stable. Gorman said asset quality metrics remained strong, with a net charge-off ratio of 38 basis points. Khayat said net charge-offs were $101 million, down 3% sequentially, and non-performing assets increased by $65 million sequentially to 63 basis points, driven by “two credits in utilities and multi-family real estate.” He said the company is “well reserved against them today” and is confident the credits will be resolved “in the coming quarters.”

The loan loss provision was $106 million, which included 38 basis points of net charge-offs and a $5 million reserve build. Khayat said the net build reflected “additional qualitative reserves to account for the macro uncertainty,” offset by improvements in Moody’s economic scenarios and credit migration trends.

KeyCorp also expanded disclosures around loans categorized as “MDFI” (a regulatory definition) and private credit exposures. Khayat said MDFI loans grew by $2.4 billion in the quarter, but about a third of that was due to reclassification of existing loans based on regulatory guidance, rather than new loan growth. He described MDFI-linked growth as tied to real estate debt funds, insurance and other “high-quality finance companies,” and specialty finance loans primarily from “AAA-rated CLOs.”

On private credit, Khayat said the company estimates approximately $10.9 billion of outstandings as of March 31, with roughly 70% through specialty finance lending. He said those loans are “98% investment grade,” with structural protections and ongoing collateral and liquidity monitoring, and that “all of our facilities are performing as structured and required.” In Q&A, Gorman said he does not view private credit as a primary area of concern, while noting the bank continues to watch sectors such as oil and gas producers, transportation, agriculture, and consumer discretionary for potential macro-driven impacts.

Capital, Basel III proposal, and updated 2026 guidance

KeyCorp executives emphasized capital return. Gorman said the bank repurchased “nearly $400 million of common stock” during the quarter, exceeding a $300 million-plus commitment previously communicated in January. He also said the company expects to buy back at least $1.3 billion of shares in 2026, up from $1.2 billion previously communicated, subject to market conditions.

Khayat reported a CET1 ratio of 11.4% and a marked CET1 ratio of 10% at quarter end. Both Gorman and Khayat pointed to the latest Basel III endgame proposal as potentially favorable, with Khayat estimating that risk-weighted assets could decline by approximately 9% under the revised standardized approach, implying a 100+ basis point improvement to the marked CET1 ratio. Until rules are finalized, management said it will continue to manage marked CET1 in a 9.5% to 10% range under current methodology.

Management raised portions of its 2026 outlook. Khayat said the company now expects:

Net interest income growth of 9% to 10% (previously 8% to 10%).

Average loans up 2% to 4% (previously 1% to 2%).

Average commercial loans growth of 6% to 8% for the year.

At the same time, Khayat reiterated comfort with the bank’s full-year expense growth guide of 3% to 4%, while noting expenses are expected to increase through the balance of the year due to investments in people and technology and seasonal impacts. Gorman said the company is investing “approximately $1 billion in technology this year,” with AI-focused use cases across client experience, credit decisioning, productivity, and risk and security monitoring.

Gorman also announced an organizational change, saying Khayat has assumed an expanded role leading “technology and operations” in addition to serving as CFO.

About KeyCorp (NYSE:KEY)

KeyCorp is a bank holding company headquartered in Cleveland, Ohio, that operates through its primary banking subsidiary, KeyBank. It provides a broad range of banking and financial services to individual consumers, small businesses, middle-market companies and large corporations. KeyBank's offerings span traditional deposit and lending products as well as more specialized financial solutions designed for commercial and institutional clients.

The company's product and service mix includes retail banking products such as checking and savings accounts, consumer and residential mortgage lending, and auto financing.