Loyal to Cleveland
Cleveland's KeyCorp has a long history with the city, as it
counts among its predecessors the Society for Savings of Cleveland,
which was established in 1849. In modern times, the Society
for Savings became the Society Corp. of Cleveland, which merged
with Albany's Key Bank in 1994 to form KeyCorp. Its most
recent boost was the $575 million acquisition of Union State Bank
Holding Company in January 2008, which added $3 billion in assets
and a number of New York branches to Key's holdings. As of
March 31, 2010, Key had $95 billion in assets, and in addition to a
network of 1,501 ATMs, Key had more than 1,000 full service
branches in 14 states, with 15,772 employees. On the 2010
Fortune 500 list, Cleveland's hometown bank came in at No. 356, up
from No. 382 a year earlier.
Business falls into four, well, key groups: consumer banking,
which is the nation's 10th-largest home equity lender; corporate
and investment banking; investment management services, which
provides a range of asset management, capital markets and
investment banking services; and technology, which provides
e-banking services to Key's network of ATMs, branches and
websites. In fact, Key was the first nationwide bank to link
branch, ATM, phone and online banking transactions to provide
instant account information to customers.
Inside the businesses
Key Consumer Banking calls itself a "community-focused retail
bank," and to that end, it works in 26 geographic districts
nationwide. Individuals and small businesses turn to Key's
retail division for mortgage and home equity loans, education
loans, deposit accounts and other traditional banking services.
Investment management services are carried out through two
subsidiaries, Victory Capital Management (which operates in
Cleveland, Cincinnati and New York City, managing the Victory
family of mutual funds); and KeyBanc Capital Markets, which
provides institutional investors, financial institutions and
middle-market corporate clients with capital raising services,
strategic advice and customized financial solutions.
The corporate and investment banking division provides
specialized financing and services through a handful of internal
groups. KeyBank Real Estate Capital, as the name implies,
provides construction and interim loans, equity and long-term
mortgages for most property types nationwide. This group is
made up of 450 professionals in 25 offices; on an average year,
they finance about $6 billion of commercial real estate. Cash
and treasury services are provided by the Key Global Treasury
Management Group, which works with international partners and
cutting-edge tech systems to help companies control their cash
flows and functions. Key Equipment Finance works with
everyone from small businesses to large corporations to provide
equipment leasing solutions; it also manages an equipment portfolio
of approximately $12.6 billion.
Last but not least, the banks' technology division fields
customer calls (seven million of them during 2009) and processes
some 14.5 million electronic transactions per month.
KeyCorp did not have much exposure to the collateralized
debt obligations and mortgage-backed securities that decimated
larger national and international banks, but it did have a hefty
portfolio of commercial property and construction loans. The
credit crisis and slowdown in the real estate market meant serious
losses in these loan holdings; Key announced that its uncollectible
debts may be 1.3 percent of average total loans, or even
more. And in October 2008, Key received $2.5 billion
under the U.S. Treasury's troubled asset relief program (TARP),
lifting its capital ratio from 12.31 percent to 14.59
percent. It also agreed to lower its prime lending rate from
4.5 percent to 4 percent, and assured worried consumers that
despite the frozen credit markets, it was still lending: $5.7
billion in fourth quarter 2008 alone, mostly loans to individuals
and small and mid-sized businesses, bringing the bank's total loan
portfolio to $77 billion.
KeyCorp Chairman and CEO Henry Meyer had stern words for those
who accused banks of dragging their heels in the loan market.
"We make money by lending money," he told the Cleveland Plain
Dealer. "To say we're not lending would be putting up a
â€˜for sale' sign. To not lend money would be crazy."
Professional all around
Management types who seek to wreak havoc with underlings don't
have a prayer at the firm. "Managers who are abusive will not
last long at Key," warns one insider. "Generally, employees
are treated well." Others say that although managers are
"smart," "organized" and "reasonable," there's "not much vision or
There isn't much room for creativity when it comes to the dress
code, either, since employees are expected to abide by the "formal
always" rules. "Sometimes it varies by manager, but most will
want formal dress," says one insider. "I'm in the Midwest,
and it's a bank. Enough said."
Offices, which mostly consist of a "small cubicle environment,"
get mediocre marks from employees. Though "spaces are all
reasonable and comfortable," they're "not exactly first class."
From all walks of life
However, insiders are mostly impressed with the company on the
diversity front, calling KeyCorp "very diverse." "It appears
that they do not discriminate on race, age, sexual orientation,
etc." Says one contact, "Some departments are more diverse;
my department is heavily Caucasian." Generally, sources tell
us the firm "would probably want more diversity." But KeyCorp
also has employee-led diversity councils and an executive-run board
of inclusion. The purpose of the board is to help recruit and
retain a diverse workforce. Furthermore, Key partners with
various organizations, including the National Black MBA
Association, the National Society of Hispanic MBAs and INROADS to
help with minority recruiting. Despite Key's efforts, one
source still thinks that minorities at Key face a "glass
ceiling." On the other hand, insiders report that "much of
upper management is female" and "there are numerous women in very
high positions." "Diversity is very important and valued by
the management team," according to one source. "They invest
in diversity initiatives and take it very seriously."