Back to top

Analyst Blog

As expected, the Federal Reserve has approved KeyCorp’s (KEY - Analyst Report) capital plan following the 2013 Comprehensive Capital Analysis and Review (CCAR). Consequently, the board of directors at KeyCorp announced a $426 million share buyback program.

KeyCorp intends to complete the buyback of shares by the end of the first quarter of 2014 through the open market or via privately-negotiated transactions. The repurchased shares will be held as treasury shares and are most likely to be reissued for a variety of corporate purposes.

KeyCorp will also consider a potential dividend hike in May. The company is looking forward to increase its dividend by 10% to 5.5 cents. The dividend hike, if approved, would become effective from the second quarter of 2013.

Additionally, last month, the company announced its intention to submit an updated capital plan to the Fed, requesting to utilize the realized gains stemming from the conclusion of the sale of Victory Capital Management and its broker-dealer subsidiary, Victory Capital Advisers, to buyback shares. The divestment is expected to conclude in the third quarter of the current year.

KeyCorp, along with many other financial institutions, had submitted its capital plan to the Federal Reserve for stress tests to secure approval for dividend increases and share buybacks. Stress test was conducted to find out whether the banks have enough capital to survive another financial crisis. 17 out of 18 companies passed the test, where Ally Financial Inc. was the one to fall short.

The Fed approved capital plans of 14 companies including KeyCorp, while the plans of Ally Financial and BB&T Corporation (BBT - Analyst Report) were not approved. JPMorgan Chase & Co. (JPM - Analyst Report) and The Goldman Sachs Group, Inc. (GS - Analyst Report) have been asked to re-submit the plans after making certain amendments.

KeyCorp’s continuous efforts to enhance shareholders’ value are highly commendable. This reflects the company’s strong fundamentals and robust liquidity.

Keycorp currently retains a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.44 +5.74%
VASCO DATA… VDSI 14.79 +4.82%
STRATTEC SE… STRT 81.23 +4.27%
PATTERSON-U… PTEN 34.45 +2.71%