KeyCorp's fee-based businesses grew 8% in H1, CEO says. The bank plans to acquire UK advisory Clearwater for European M&A expansion. KEY stock watch.
KeyCorp reported growth across its priority fee-based businesses in the second quarter, with investment banking pipelines rising 9% from the first quarter and assets under management hitting a record $74 billion. The bank's commercial payments unit delivered double-digit fee growth year over year, Chairman and CEO Chris Gorman said Tuesday in an earnings release.
The bank's priority fee-based businesses grew 8% in the first half compared with the same period a year earlier, according to a presentation published Tuesday.
"We are seeing healthy client engagement and solid activity levels across our businesses," Gorman said on an earnings call. "We remain well-positioned to perform through a range of potential economic scenarios."
KeyCorp serves individuals and businesses in 15 states through KeyBank and provides corporate and investment banking to middle-market companies across the U.S. through KeyBanc Capital Markets. In April, the company announced plans to expand its financial advisory services to institutional clients by entering the Western European market. It agreed to acquire Clearwater UK, a middle-market investment banking advisory firm based in the United Kingdom. The deal is expected to close in the second half, pending regulatory approvals and customary conditions, KeyCorp said in an April 22 statement.
"This transaction represents a strategic extension of our leading middle-market advisory franchise and expands our ability to serve M&A clients and prospects internationally," Gorman said on the call.
Within the U.S., KeyCorp has been adding middle-market commercial banking teams in regions where it did not previously have a strong presence. In May, it hired experienced local lenders in Southeast Michigan. In March, it launched a five-person middle-market team in Atlanta, following earlier expansions in Chicago and Southern California.
"We have done a really good job expanding our core middle-market business in new cities," Gorman said.
Chief Financial Officer Clark Khayat said on the call that the company expects average commercial loans to increase 8% to 10% this year. The higher forecast reflects strong loan growth in the first half and healthy loan pipelines supporting the second half of 2026, Khayat said.
KeyCorp holds an Alpha Score of 66 out of 100 on AlphaScala, indicating a moderate outlook.
The Clearwater acquisition is scheduled to close later this year.
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