KeyCorp Outlook Raised to Positive by S&P
S&P Global Ratings revised its outlook on KeyCorp (NYSE:KEY) to positive from stable on 19 June 2026, while affirming the issuer’s BBB long‑term credit rating. In the same action, S&P upgraded the outlook on KeyBank N.A. to positive from stable, affirming its BBB+ rating.
The agency cited a series of meaningful business and financial improvements, including stronger profitability metrics, more conservative risk‑management policies, and substantially higher capital ratios. Net interest margin (NIM) rose to 2.87 % in the first quarter of 2026, up from 2.58 % in the first quarter of 2025, a gain attributed to a large securities repositioning, fixed‑rate asset repricing and lower deposit costs.
KeyCorp’s Common Equity Tier 1 (CET1) ratio reached 11.4 % as of 31 March 2026, up from 9.1 % at year‑end 2022. The increase was supported by earnings retention and a $2.8 billion investment by Bank of Nova Scotia in 2024, which gave the Canadian bank a 14.9 % equity stake. The adjusted CET1 ratio stood at 10.0 % on the same date, positioning the firm favorably against many large regional‑bank peers.
Asset quality also improved: non‑performing assets and net charge‑offs declined modestly. Net charge‑offs to average loans fell to 38 basis points in Q1 2026, down from 39 bps in Q4 2025 and 43 bps a year earlier. Criticised loans decreased to 4.9 % of total loans as of 31 March 2026, compared with 6.0 % a year earlier.
The positive outlook signals that S&P could raise KeyCorp’s credit rating within the next two years if the company’s financial performance continues to improve and aligns with higher‑rated peers, particularly through more stable earnings amid potential interest‑rate volatility. S&P also expects capital ratios to decline modestly toward peer medians over that horizon.