KeyCorp Reports Robust Second Quarter 2025 Financial Results Demonstrating Strong Growth and Operational Excellence
KeyCorp (NYSE: KEY) has announced its second quarter 2025 financial results, showcasing significant year-over-year growth and operational strength. The bank reported a net income from continuing operations attributable to Key common shareholders of \(387 million, or \)0.35 per diluted common share, marking a 63.3% increase compared to \(237 million, or \)0.25 per diluted share, in the second quarter of 2024. This performance underscores KeyCorp’s effective execution of its growth strategy and resilience in a dynamic economic environment.
Financial Highlights and Operational Metrics: - Total revenue (taxable equivalent) reached \(1.84 billion, up 20.6% year-over-year, driven by a 27.9% increase in net interest income to \)1.15 billion and a 10% rise in noninterest income to \(690 million. - Net interest margin improved by 62 basis points year-over-year to 2.66%, reflecting lower deposit costs, strategic reinvestment in higher-yielding assets, and an optimized funding mix. - Period-end loans increased by \)1.6 billion quarter-over-quarter, with commercial loans up \(3.3 billion or 5% year-to-date, signaling robust lending activity. - Credit quality improved with net charge-offs declining 8% quarter-over-quarter to \)102 million, and nonperforming loans stable at 0.65% of period-end portfolio loans. - Assets under management reached a record \(64 billion, highlighting growth in wealth management services. - Investment banking pipelines remain historically elevated, with over \)30 billion of capital raised for clients in the quarter.
Segment Performance: - Consumer Bank revenue grew 20.3% year-over-year to \(912 million, with net income doubling to \)122 million. - Commercial Bank revenue increased 26.8% year-over-year to \(974 million, with net income rising 69.4% to \)349 million.
Capital and Efficiency: - KeyCorp maintained strong capital ratios with an estimated Common Equity Tier 1 ratio of 11.7% and a tangible common equity to tangible assets ratio of 7.8%. - The cash efficiency ratio improved to 62.4%, reflecting disciplined expense management amid revenue growth.
CEO Chris Gorman commented, “Our second quarter results demonstrate continued strong momentum. Revenue was up 21% year-over-year driven by our clearly defined net interest income tailwinds and 10% growth in noninterest income, while expenses grew 7%. Credit quality continues to trend in a positive direction with overall credit migration improving for the sixth consecutive quarter.”
Analysis and Forward Outlook: KeyCorp’s Q2 2025 results reflect a well-executed strategy focused on organic growth, credit quality improvement, and operational efficiency. The 27.9% increase in net interest income and 62 basis points expansion in net interest margin are particularly notable, driven by lower deposit costs and strategic asset reinvestment. The bank’s ability to grow commercial loans by 5% year-to-date and maintain stable credit metrics positions it well for continued growth.
The record $64 billion in assets under management and elevated investment banking activity underscore KeyCorp’s expanding footprint in wealth management and capital markets. The disciplined expense control, evidenced by a modest 7% increase in expenses against a 21% revenue rise, enhances profitability and operational leverage.
Looking ahead, KeyCorp’s commitment to increasing frontline bankers by 10% in 2025 and investments in technology are expected to sustain growth momentum. The bank’s strong capital position provides a solid foundation for navigating economic uncertainties and capitalizing on market opportunities.
This comprehensive financial performance and strategic positioning affirm KeyCorp’s status as a leading bank-based financial services company with robust growth prospects.
Source Document: KeyCorp Q2 2025 Earnings Release