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KEYCORP REPORTS FOURTH QUARTER 2025 NET INCOME OF $474 MILLION, OR $.43 PER DILUTED COMMON SHARE

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Revenue of $2.0 billion; Record full year revenue of $7.5 billion, up 16% year-over-year adjusted fo...

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AI Summary

KeyCorp reported robust Q4 2025 results with record revenue of $2 billion and a significant recovery in net income to $474 million. The company's continued growth in pre-provision net revenue and net interest margin highlights effective management strategies and a strong underlying business performance.

Sentiment Rationale

The significant revenue and earnings rebound, alongside strong capital ratios, suggests increased investor confidence and potential upward price pressure.

Trading Thesis

KEY is positioned for potential upside as it demonstrates strong revenue growth and profitability, encouraging a bullish outlook in the next quarter.

Market-Moving

  • Revenue growth of 16% YoY could attract investor attention.
  • Strong capital ratios and share repurchases indicate robust financial health.
  • Improvements in asset quality with decreased nonperforming loans may support price momentum.

Key Facts

  • Record revenue of $2 billion in Q4 2025, up 131.8% YoY.
  • Net income reached $474 million, a significant rebound from Q4 2024.
  • Pre-provision net revenue increased by 44% year-over-year.
  • Net interest margin grew to 2.82%, with a 3% quarterly rise.
  • Common Equity Tier 1 ratio stands at 11.7%, indicating strong capital position.

Companies Mentioned

  • Scotiabank (BNS): Valuation impacts related to Scotiabank gave rise to one-time charges last year.

Earnings

This news falls under 'Earnings' as it presents quarterly financial results, showcasing KeyCorp's strong fiscal performance and growth prospects, which are critical for investor decision-making.

KeyCorp Reports Strong Fourth Quarter 2025 Results

KeyCorp (NYSE: KEY) has announced notable financial performance for the fourth quarter of 2025, reporting a net income of $474 million, equivalent to $.43 per diluted common share. This marks a significant increase compared to the $454 million net income in the previous quarter. The results reflect KeyCorp’s solid operational execution and strategic initiatives aimed at driving revenue growth.

Record Full Year Revenue and Earnings Growth

In a year characterized by substantial growth, KeyCorp achieved a record full-year revenue of $7.5 billion, representing a 16% increase year-over-year when adjusted for selected items. The fourth quarter alone showcased a revenue total of $2.0 billion, with pre-provision net revenue rising to $46 million quarter-over-quarter. Additionally, full-year pre-provision net revenue soared by 44% year-over-year.

Highlights of Financial Performance

  • Net interest income increased by 3% sequentially, with a net interest margin of 2.82%, up 7 basis points.
  • Nonperforming assets decreased by 6% quarter-over-quarter, indicating improved asset quality.
  • Net charge-offs declined to 39 basis points, down from the previous period.
  • The Common Equity Tier 1 ratio stood at 11.7%, showcasing a robust capital position.

CEO Chris Gorman's Insights

Chris Gorman, Chairman and CEO of KeyCorp, expressed pride in the bank's performance, stating, “Our strong fourth quarter and full-year results demonstrate the consistent and significant progress we are making towards achieving sustainable mid-to-high teens returns on tangible common equity.” Gorman highlighted that the bank generated approximately 1,200 basis points of adjusted operating leverage throughout the year and emphasized the commitment to returning capital to shareholders, citing the repurchase of $200 million in common shares during the fourth quarter.

Future Outlook for KeyCorp

Looking ahead, Gorman is optimistic about delivering another year of strong organic revenue and earnings growth. KeyCorp continues to invest in its workforce and technology, which are expected to enhance service capabilities and client offerings. The bank reported a record $70 billion in assets under management, with investment banking and debt placement fees achieving the second-best annual performance in its history.

Key Financial Highlights

Below are some notable financial metrics from KeyCorp's fourth quarter and year-end results:

  • Income from continuing operations attributable to Key common shareholders: $474 million
  • Earnings per share (diluted): $.43
  • Book value at period end: $16.27
  • Return on average tangible common equity: 12.43%
  • Total revenue: $2.005 billion (up 5.8% from the previous quarter)

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