KEY-PL — KeyCorp

Key Financial Results and Metrics

• Earnings Per Share (EPS): $0.43 for Q4 2025; adjusted EPS was $0.41.
• Revenue: Exceeded $2 billion, up 12% year-over-year on an adjusted basis.
• Net Interest Income (NII): Increased 15% year-over-year; tax-equivalent NII up 23% against initial guidance of 20%.
• Expenses: Grew by 2% in Q4 and 4.6% for the full year, primarily driven by hiring and compensation.
• Operating Leverage: Achieved approximately 1,200 basis points of operating leverage and 280 basis points of fee-based operating leverage in 2025.
• Capital Ratios: CET1 ratio at 10.3%, with plans to manage it down to the higher end of the target range (9.5%-10%) by 2026.
• Loan Growth: C&I loans grew by 9% in 2025; overall loan growth expected at 1%-2% in 2026.

Strategic Updates and Business Highlights

• Share Repurchases: $200 million repurchased in Q4, with plans for at least $300 million in Q1 2026 and $1.2 billion for the full year.
• Investment in Technology: $100 million invested in technology focused on customer-facing capabilities.
• Wealth Management: Assets under management reached a record $70 billion, with significant growth in the mass affluent segment.
• Commercial Payments: Fee-equivalent revenue grew 11% in 2025, driven by investments in bankers and new geographies.
• Board Changes: Two new directors nominated, enhancing governance and strategic capabilities.

Forward Guidance and Outlook

• 2026 Revenue Growth: Expected to increase by about 7%, with NII growth of 8%-10% and non-interest income growth of 3%-4%.
• Expense Growth: Anticipated to be 3%-4%, implying positive operating leverage.
• Loan Growth: Projected at 1%-2% overall, with commercial loans expected to grow by about 5%.
• Return on Tangible Common Equity (RoTCE): Aiming for 15%+ by year-end 2027, with potential to reach 16%-19% thereafter.

Bad News, Challenges, or Points of Concern

• Market Uncertainty: Concerns about macroeconomic conditions and geopolitical risks could impact growth and credit quality.
• Loan Quality: While credit quality metrics improved, there are watch areas including consumer discretionary, healthcare, and agriculture.
• Investment Banking Activity: While there is optimism for increased M&A activity, visibility beyond Q1 2026 remains limited, and past trends have shown muted activity.

Notable Q&A Insights

• Strategic Focus: CEO Chris Gorman emphasized organic growth in middle market, payments, and investment banking as key priorities.
• Conservatism in Guidance: CFO Clark Khayat acknowledged a conservative outlook due to macro uncertainties, despite strong backlogs and hiring.
• Commercial Loan Growth: There is potential for growth to accelerate beyond the 5% guidance as market conditions improve.
• AI Investments: Gorman highlighted ongoing investments in AI and technology, with expectations for future efficiencies.
• Credit Quality Monitoring: The management team is vigilant about potential risks in certain sectors while maintaining a positive outlook on overall credit quality.

This summary encapsulates the essential financial performance, strategic initiatives, future expectations, and challenges faced by KeyCorp as discussed in the Q4 2025 earnings call.