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KEY NYSE· Key Corporation
Earnings report Q4 2023

KeyCorp's Revenue Declines in 2023 Quarter

Segments of revenue

KeyCorp operates through two major business segments, Consumer Bank and Commercial Bank. In the latest quarter of 2023, KeyCorp reported a decrease in revenue compared to the previous year. The specific breakdown of segment revenues is not provided in the given context.

Strengths

Despite the decline in revenue, KeyCorp's management highlights the company's strong position to develop long-lasting relationships with clients. They aim to support clients on their financial journeys and be by their sides along the way. This focus on client relationships can contribute to future revenue growth.

Challenges

KeyCorp faced challenges in the latest quarter, resulting in a decrease in net income attributable to the company. The decline of 32.1% in net income was largely driven by higher interest rates on deposits and the FDIC special assessment charge. Additionally, taxable equivalent net interest income decreased by $133 million, or 5.5%, reflecting higher interest-bearing deposit costs. The company also experienced a decrease in average deposits by $6.2 billion, or 6.8%, due to changes in client behavior influenced by the higher interest rate environment.

Noteworthy

KeyCorp observed an increase in average loans and leases by $1.1 billion, or 2.6%, driven by growth in residential mortgage loans. This increase in loans and leases can be seen as a positive sign for future revenue generation.

Summary

KeyCorp's latest quarter performance showed a decline in revenue, primarily due to higher interest rates on deposits and the FDIC special assessment charge. The company faced challenges in maintaining net income and experienced a decrease in average deposits. However, KeyCorp's focus on developing strong client relationships and the growth in average loans and leases, particularly in residential mortgages, provide potential opportunities for future revenue growth.

Source documents

Form 10-K  filed on Feb 22, 2024
122 pages scanned

Reference data

Company financials Q4 revenue 1.43B
Analyst estimates Q4 EPS missed by -88.88%
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