KeyCorp Chairman reaffirms earnings guidance for next two quarters

While presenting at the Barclays Global Financial Services Conference, KeyCorp Chairman Christopher Gorman stated according to a transcript of the event: “This continues to be the very challenging time for our industry, but with challenges also come opportunities. Key is well positioned to continue to serve our clients through all market conditions and deliver long-term value for our shareholders. It starts with having a foundation with a strong core funded balance sheet… There’s been a lot of focus on our balance sheet positioning, which has clearly been a near-term headwind. However, over the next 6 quarters, Key will benefit from a well-defined net interest income opportunity as short-term swaps and treasuries reprice… We will further reduce expenses in the second half of 2023 and accelerate our plans to streamline and simplify our businesses and position Key for success in the future environment in the post positive environment. Another strength of our company is credit quality. Credit losses remain relatively low across the entire industry. But as we move through the business cycle, asset quality will matter… On the capital front, we will benefit from ongoing capital generation and the roll down of our AOCI over the next 6 quarters. We expect our common equity Tier 1 ratio to be above our 9% to 9.5% targeted range by year-end. I will close by reaffirming our earnings guidance for the next 2 quarters and for the full year, consistent with that which we provided during our second quarter earnings call, which is included in the appendix of our presentation. I am confident in the long-term outlook of our business, our business flows are good, and our risk management practices are strong. Today, we are underearning due to our short-dated swaps and treasury securities, which will mature over the next 6 quarters. As these positions mature and capital markets activity normalizes, we expect to deliver results which reflect the long-term earnings potential of our company.”