KeyCorp Reports $472 Million Net Income and $1.96 Billion Revenue in Q2 2026

KeyCorp reported a net income of $472 million for the second quarter of 2026, translating to diluted earnings per share of $0.44, a notable increase from $387 million or $0.35 per share in the same quarter of 2025. The company's total revenue for the quarter reached $1.96 billion, up from $1.84 billion year-over-year, driven by a 9.4% increase in net interest income, which amounted to $1.25 billion. This growth was attributed to a favorable shift in the balance sheet composition towards higher-yielding commercial and industrial loans, alongside a reduction in deposit costs due to declining interest rates.

In comparison to the previous fiscal period, KeyCorp's financial performance showed significant improvements. The net interest margin increased by 23 basis points to 2.89%, while average loans rose to $110.1 billion, reflecting a $4.4 billion increase from the prior year. The commercial loan portfolio was a key driver, with average commercial loans increasing by $6.7 billion. Additionally, the company reported a 15.5% year-over-year growth in Assets Under Management, totaling $74.2 billion, bolstered by favorable market conditions and strong performance in wealth management.

Strategically, KeyCorp announced the acquisition of Clearwater Corporate Finance LLP, a UK-based investment banking advisory firm, which is expected to enhance its middle-market mergers and acquisitions advisory capabilities. This acquisition aligns with KeyCorp's focus on expanding its fee-based business segments, which collectively grew by 8% in the first half of 2026 compared to the previous year. The company also continued its disciplined capital deployment strategy, repurchasing $341 million in common shares during the second quarter and maintaining a strong capital position with a Common Equity Tier 1 (CET1) ratio of 11.2%.

Operationally, KeyCorp reported a 3% increase in relationship households and a 2% rise in commercial clients year-over-year, indicating successful client acquisition and relationship deepening efforts. The company’s employee headcount increased, reflecting growth in its fee-based businesses. However, nonperforming assets rose due to specific exposures, although overall portfolio performance remained within management's expectations. The net charge-off rate was reported at 42 basis points for the quarter, with year-to-date charge-offs at the low end of the full-year outlook.

Looking ahead, KeyCorp has raised its full-year 2026 outlook for revenue, net interest income, and average loans, reflecting stronger-than-expected commercial loan growth and a healthy pipeline. The company anticipates continued benefits from fixed-rate asset repricing and disciplined balance sheet management. However, it acknowledges that actual results may vary due to fluctuations in interest rates, deposit pricing, and broader economic conditions. KeyCorp remains focused on maintaining its risk discipline and capitalizing on growth opportunities in a stable competitive environment.