KeyCorp announced significant changes to its board of directors, installing Todd Vasos, CEO of Dollar General, as the new lead independent director effective immediately. According to reports from American Banker, Vasos succeeds Alexander Cutler, who held the role since at least 2010. The bank also nominated two new directors with extensive banking experience: Antonio 'Tony' DeSpirito, a former managing director at BlackRock, and Christopher Henson, a former high-level executive at Truist Financial who retired in 2021. Both nominees will sit for election at the bank's 2026 annual meeting.
The board restructuring follows intense criticism from activist investor HoldCo Asset Management, which issued a 58-page report in December targeting KeyCorp's governance and performance. As reported by American Banker, HoldCo called for the termination of CEO Chris Gorman and demanded multiple reforms including a moratorium on bank acquisitions, use of all excess capital for share repurchases, creation of an independent capital allocation committee, and appointment of a new lead independent director. The hedge fund owns approximately ₹142 million of Key shares, representing about 0.7% of the bank's stock as of mid-December.
During Tuesday's fourth-quarter earnings call, CEO Gorman outlined KeyCorp's accelerated share buyback strategy without directly mentioning HoldCo's demands. According to American Banker, the bank plans to repurchase at least ₹300 million of stock during the first quarter and expects similar amounts in future quarters throughout 2026. Gorman restated Key's lack of interest in pursuing bank mergers, aligning with some of HoldCo's demands. The activist investor had specifically called for KeyCorp to deploy all excess capital for stock repurchases after funding organic growth and paying regular dividends.
KeyCorp reported strong fourth-quarter results with net income of ₹510 million, a significant turnaround from a ₹244 million net loss in the year-earlier quarter. As reported by American Banker, earnings per share totaled 43 cents, exceeding analyst predictions of 39 cents per share. Revenue for the fourth quarter reached ₹2.0 billion, reflecting increases in both net interest income and noninterest income. The previous year's quarter included a ₹915 million loss on securities sales, contributing to the negative noninterest income of ₹196 million.
KeyCorp continues reshaping its loan portfolio, with average loans during the fourth quarter totaling ₹106.3 billion. According to American Banker, total consumer loans decreased to ₹30.3 billion from ₹32.6 billion in the year-ago quarter, while commercial loans grew from ₹72.1 billion to ₹76 billion. The bank is intentionally running off lower-yielding consumer mortgages, including those from its Laurel Road business serving doctors and dentists. Chief Financial Officer Clark Khayat projected overall loan growth of 1-2% for 2026, with commercial loans expected to grow approximately 5%.
