A maker of everyday banking and big-money deals, this US bank holding company serves individuals and small businesses through KeyBank's branches and digital brand, and powers large corporate deals through its KeyBanc Capital Markets platform—syndicated loans, stock and bond underwriting, and merger advice. Its roots run back to the Commercial Bank of Albany in 1825 and Cleveland's Society for Savings in 1849, which merged in 1994 to form today's company. The red "key" logo, designed in 1979, symbolizes unlocking opportunity.
KeyCorp raised its full-year revenue and net interest income outlook as commercial loan growth accelerated and the net interest margin expanded to 2.87%.
Commercial loans grew for the second straight quarter, confirming the end of a three-year balance sheet contraction. rose 20% to $509 million as expanded 23 to 2.87% and reached $1.96 billion, while the fell. Management raised its full-year revenue growth outlook to 7–8%, signaling the earnings reset is durable.
Key takeaways
(taxable-equivalent) rose $108 million to $1.26 billion, driven by lower deposit costs and a favorable shift toward higher-yielding commercial and industrial loans.
Average total loans grew $4.4 billion, with a $6.7 billion increase in commercial loans offsetting a $2.3 billion intentional run-off of low-yielding consumer loans, marking the second consecutive quarter of loan growth after three years of contraction.
The expanded 23 to 2.87%, the highest level since Q1 2022, as the securities repositioning continued to lower funding costs.
Section summaries
Management's Discussion and Analysis
KeyCorp Q2 2026 net income rose to $472M, driven by a 23bps net interest margin expansion and 2% noninterest income growth.
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(TE) increased $108 million to $1.26 billion, driven by lower deposit costs and a favorable shift toward higher-yielding commercial and industrial loans.
Noninterest income rose 2.3% to $706 million, led by trust and investment services and cards and payments income, partially offset by lower investment banking fees and commercial mortgage servicing fees.
The decreased to $92 million from $138 million a year ago, reflecting a more resilient economic outlook and an improved commercial portfolio mix.
Management raised its full-year 2026 growth outlook to 7–8% from approximately 7%, and growth to 9–11% from 9–10%, citing stronger commercial loan growth and healthy pipelines.
What changed
The Q1 2026 watch item on whether commercial loan growth would sustain above 7% in Q2 was answered: average commercial loans grew 7.9% in Q1 and the Q2 narrative reports a $6.7 billion increase, confirming durable client demand rather than a single-quarter rebound.
The Q1 2026 watch item on whether the would continue expanding toward the 3.00–3.05% exit rate was partially answered: the margin reached 2.87%, up from 2.64% in Q1, putting the year-end exit rate within reach.
The Q1 2026 watch item on whether the would stabilize near 11.4% or decline further was not directly updated in the Q2 narrative, though loan growth continued to absorb capital.
The Q1 2026 watch item on whether investment banking fees would maintain double-digit growth in Q2 was answered: investment banking fees declined, partially offsetting gains in trust and cards income, indicating the capital markets recovery may be uneven quarter to quarter.
What to watch
Whether the reaches the 3.00–3.05% exit rate by year-end 2026, confirming the securities repositioning has fully played out.
Whether commercial loan growth sustains its pace in the second half of 2026, validating the raised full-year growth of 9–11%.
Whether the stabilizes or declines further as loan growth accelerates, given that capital consumption from growth is now replacing capital accumulation from contraction.
Whether investment banking and debt placement fees recover in Q3 after the Q2 decline, or whether the fee-income mix continues to shift toward trust and cards and payments income.
Average total loans grew $4.4 billion, with a $6.7 billion increase in commercial loans offsetting a $2.3 billion intentional run-off of low-yielding consumer loans.
Noninterest income rose 2.3% to $706 million, led by trust and investment services and cards and payments income, partially offset by lower investment banking fees and commercial mortgage servicing fees.
Noninterest expense increased 5.5% to $1.2 billion, primarily due to an 11.5% rise in personnel costs from higher salaries, incentive compensation, and headcount.
The decreased to $92 million from $138 million, reflecting a more resilient economic outlook and an improved commercial portfolio mix.
KeyCorp raised its full-year 2026 outlook to up 7-8% and to up 9-11%, citing stronger commercial loan growth and healthy pipelines.
Quantitative and Qualitative Disclosures About Market Risk
The information presented in the “Market risk management” section of the Management’s Discussion & Analysis of Financial Condition & Results of Operations is incorporated herein by reference.
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The information presented in the “Market risk management” section of the Management’s Discussion & Analysis of Financial Condition & Results of Operations is incorporated herein by reference.
The information presented in the Legal Proceedings section of Note 14 (“Contingent Liabilities and Guarantees”) of the Notes to Consolidated Financial Statements (Unaudited) is incorporated herein by reference.
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The information presented in the Legal Proceedings section of Note 14 (“Contingent Liabilities and Guarantees”) of the Notes to Consolidated Financial Statements (Unaudited) is incorporated herein by reference.
For a discussion of certain risk factors affecting us, see the section titled “Supervision and Regulation” in Part I, Item 1. Business, on pages 11-24 of our 2025 Form 10-K; Part I, Item 1A. Risk Factors, on pages 25-43 of our 2025 Form 10-K; the section titled “Supervision and…
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For a discussion of certain risk factors affecting us, see the section titled “Supervision and Regulation” in Part I, Item 1. Business, on pages 11-24 of our 2025 Form 10-K; Part I, Item 1A. Risk Factors, on pages 25-43 of our 2025 Form 10-K; the section titled “Supervision and regulation” in this report; and our disclosure regarding forward-looking statements in this report.
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