At a Glance
"There is truly a team spirit here"
"A little too corporate"
"Unable to compete with New York or middle-market firms"
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 creativity.”
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.”
127 Public Square
Cleveland, OH 44114
Phone: (216) 689-6300
Employer Type: Public
Stock Symbol: KEY
Stock Exchange: NYSE
Chairman & CEO: Henry L. Meyer III
2010 Employees (All Locations): 17,000