KeyCorp (KEY): BCG Matrix [Dec-2025 Updated]

You're after a clear-eyed view of where KeyCorp (KEY) is placing its capital and seeing returns in late 2025, so let's map their business segments onto the classic BCG Matrix. Honestly, the picture is sharp: strong Cash Cows, like Core Net Interest Income projected to surge over 20%, are funding high-growth Stars such as KeyBanc Capital Markets and Wealth Management, which now holds $68 billion in AUM. But you'll also see where they're intentionally shrinking older loan books-the Dogs-and placing big, expensive bets on future tech and new market expansions, which we've categorized as Question Marks. Dive in to see exactly which units are driving the profit engine and which ones are demanding investment for tomorrow's growth.

Background of KeyCorp (KEY)

You're looking at KeyCorp (KEY), which you know operates KeyBank, one of the nation's older financial institutions, with roots that actually go all the way back to 1825 in Albany, New York. The company as you see it today really formed in 1994 when Society Corporation of Cleveland merged with KeyCorp of Albany. Honestly, it's a long history, but what matters now is its current footprint, serving clients across 15 states.

KeyCorp's business model is built on two main pillars, which will be key for our BCG analysis later. First, there's the Consumer Bank, which handles retail and small business needs-think deposits, lending, mortgages, and their digital lending arm, Laurel Road®, which focuses on professionals like healthcare workers. Second, you have the Commercial Bank, which serves mid-sized companies and larger entities. This segment includes the middle-market focus of KeyBanc Capital Markets, offering everything from M&A advice to debt and equity capital markets services.

When we look at where they stand as of late 2025, the recent numbers from the third quarter of 2025 really paint the picture. For Q3 2025, KeyCorp reported earnings per share of $0.41, beating expectations, and total revenue hit $1.9 billion. That revenue mix is still heavily weighted toward lending, as Net Interest Income (NII) was $1.19 billion for the quarter, pushing their Net Interest Margin (NIM) to 2.75%, hitting their year-end target early. The company's tangible book value per common share was $13.38 at the end of September 2025, showing solid capital management.

The strategic focus in 2025 involved a deliberate shift in the loan portfolio; for instance, average commercial loans were up, driven by Commercial & Industrial growth, while they intentionally let low-yielding consumer loans run off. Plus, they're investing in growth, aiming to increase front-line bankers and relationship managers by 10% in 2025. Finance: draft 13-week cash view by Friday.

KeyCorp (KEY) - BCG Matrix: Stars

Stars represent KeyCorp business units operating in high-growth markets where they maintain a strong market share. These units require significant investment to maintain their leadership position and fuel further growth, often resulting in cash flow neutrality due to high reinvestment needs.

KeyBanc Capital Markets is a clear Star, showing strong fee momentum. Investment banking and debt placement fees were up 19% through midyear 2025, as specified in the strategic outlook. This performance is on track to deliver the second best year in investment banking history for KeyCorp. For the first half of 2025, investment banking fees specifically reached $353 million.

The Wealth Management segment is also positioned as a Star, evidenced by its record scale. Assets Under Management (AUM) hit a record $68 billion in Q3 2025. This represents an 11% year-over-year increase in AUM as of the third quarter.

The growth in these fee-based areas is supported by strong forward business indicators. Commercial pipelines remain at historically elevated levels, nearly double the levels seen one year prior as of Q3 2025. Investment banking pipelines, particularly M&A, are also up materially.

Furthermore, the focus on the mass affluent segment is yielding results. This area saw record sales production in the first half of 2025. Since its launch in 2023, this specific business has added approximately 50,000 households, $3 billion of AUM, and over $6 billion of total client assets to KeyCorp.

Here's a look at the key metrics defining the Star positioning for these business units as of the latest reported periods in 2025:

The success of these areas is reflected in the overall fee income growth:

• Fee income was up high single digits compared to 2024 for both the quarter and year-to-date as of Q3 2025.
• KeyCorp is on track to deliver its second best year in investment banking in history.
• The company is focused on maintaining momentum by investing in front line bankers, client advisors, and technology platforms.

KeyCorp (KEY) - BCG Matrix: Cash Cows

Cash Cows for KeyCorp (KEY) are those business units operating in mature markets where the bank maintains a high market share, generating consistent, high-margin cash flow that funds other strategic areas. These are the core profit engines you rely on for stability.

The primary driver of this cash generation is the Net Interest Income (NII). For the full Fiscal Year 2025, KeyCorp projects its NII to surge by 20-22% over the prior year, solidifying its role as the main profit engine. To give you a concrete look at the recent performance supporting this, the NII for the third quarter of 2025 specifically reached $1,193 million.

This strong NII performance is underpinned by the Net Interest Margin (NIM), which you saw reach the year-end target of 2.75% ahead of schedule in Q3 2025. This expansion was driven by factors like lower deposit costs and the repricing of fixed-rate assets into higher-yielding investments.

The foundation of this margin strength is the stable, large deposit base. As of Q3 2025, the average deposits totaled $150.4 billion. You can see how this funding base supports the lending engine:

Within the lending portfolio, Commercial and Industrial (C&I) lending represents a segment where KeyCorp aims to maintain its high share in a mature market. While the overall average loan balances are expected to decline slightly for the full year 2025, the focus is on remixing the portfolio. Specifically, KeyCorp expects commercial loans to grow by around 5% for the full year 2025, reflecting the strategic preference for these relationship-based loans over lower-yielding consumer mortgages. For instance, in Q3 2025, average commercial loans increased by 1.5% quarter-over-quarter.

These Cash Cow segments allow KeyCorp to generate the necessary liquidity for the entire organization. You should view these figures as the reliable cash flow source that funds the riskier Question Marks and maintains the existing infrastructure.

• Core NII projected to surge by 20-22% in FY 2025.
• NIM hit the 2.75% target one quarter early in Q3 2025.
• Average Deposits stood at $150.4 billion in Q3 2025.
• C&I lending segment projected for commercial loan growth near 5% in 2025.

Finance: draft next quarter's NII sensitivity analysis by end of week.

KeyCorp (KEY) - BCG Matrix: Dogs

DOGS, in the Boston Consulting Group Matrix, represent business units or product lines operating in low-growth markets with a low relative market share. For KeyCorp (KEY), these are typically legacy assets or categories where the strategic decision is to minimize investment and manage for eventual exit or run-off, as expensive turn-around plans rarely prove worthwhile. These units often neither significantly earn nor consume cash, but they tie up capital that could be deployed elsewhere.

The primary evidence for KeyCorp (KEY) having 'Dogs' centers on the deliberate shrinking of less profitable, low-yielding consumer loan segments, which aligns perfectly with the characteristics of this quadrant. This is a strategic choice to optimize the balance sheet for higher-yielding commercial assets.

The intentional run-off of low-yielding consumer loans, which caused average consumer loans to decline by $573 million in Q3 2025.

You are actively managing down the consumer loan book where yields are insufficient. This action is a clear indicator of treating those specific loan categories as cash traps to be minimized. The impact was immediate and measurable in the third quarter of 2025.

• Average consumer loans declined by $573 million from Q2 2025 to Q3 2025.
• Total consumer loans represented $30,830 million in average balances for Q3 2025.
• This decline reflects a 1.8% sequential drop in total consumer loans (Q3 2025 vs. Q2 2025).

Residential real estate loan portfolio, which is seeing a planned runoff.

The residential real estate mortgage segment is a key component of this run-off strategy, indicating its classification as a Dog or a unit being actively moved out of that category. While the exact planned runoff of $600 million per quarter isn't explicitly confirmed in the latest reports, the trend shows a consistent reduction in this portfolio.

Legacy, broad-based consumer loan categories that are seeing declines, contributing to a projected 2-5% drop in average loan balances for 2025.

This overall projection for the entire loan book underscores the systemic nature of the run-off, which is not isolated to one small area but is a broad strategic move away from lower-yielding assets. You are aiming for a leaner, higher-quality loan book overall.

• Projected full-year 2025 decline in average loans is between 2% and 5% due to strategic runoff.
• The intentional reduction in low-yielding consumer loans is a primary driver of this expected contraction.

KeyCorp (KEY) - BCG Matrix: Question Marks

You're analyzing the parts of KeyCorp (KEY) that are in high-growth markets but haven't yet captured a dominant market share. These are the areas consuming cash now, hoping to become future Stars. For KeyCorp in 2025, these Question Marks are heavily concentrated in strategic, forward-looking initiatives.

Embedded Banking offerings fit this profile perfectly. KeyCorp stated they were one of the first banks to build these capabilities, signaling a high-potential, technology-focused area that requires continued investment for future scale. While specific revenue for this offering isn't isolated, the commitment to developing this differentiated platform, alongside other growth areas, shows where management sees future market expansion.

The push in fee-based revenue streams also contains Question Marks. Commercial payments-related fees showed strong momentum, growing at a high single-digit rate year-over-year in the second quarter of 2025. This growth is expected to be in the mid to high single-digit range for the full year 2025, which, while positive, still represents a smaller, high-growth revenue stream compared to Net Interest Income.

The necessary cash burn to support these growth areas is evident in the expense data. Strategic technology and workforce investments are currently elevating expenses. KeyCorp boosted its technology spend to $900 million for 2025, a 10% increase from 2024, plus an additional boost of nearly $100 million in technology investment during the first half of 2025. Also, the bank is on track to increase its total frontline bankers and client advisers by 10% in 2025. These investments drove second-quarter 2025 noninterest expenses to $1.15 billion, which was a 7% increase year-over-year.

The expansion into new geographies is a clear, high-cost investment play. The expansion of commercial teams in new markets like Chicago and Southern California, which started late in 2024, is a high-cost, high-reward growth push. These teams, which include investment bankers, middle market relationship managers, and payments advisors, are targeted to help KeyCorp reach a total commercial banker headcount of 170 to 180 by the end of 2025. These new hires have already driven new client growth and loan volumes in those specific markets.

You can see the investment intensity across these growth vectors:

The strategy here is clear: pour resources into these specific, high-potential areas. If the market adoption for Embedded Banking accelerates, and the new commercial teams capture significant market share, these units could shift to the Star quadrant. If the high expenses don't translate into market share gains quickly, they risk becoming Dogs.

Key actions related to these Question Marks include:

• Invest Heavily: Continue funding the $900 million technology roadmap.
• Monitor Adoption: Track the revenue contribution from new client growth generated by the Chicago and Southern California teams.
• Expense Discipline: Ensure the 7% year-over-year noninterest expense growth in Q2 2025 is yielding returns, as the overall 2025 expense guidance is 3%-5% growth.
• Scale Payments: Drive commercial payments-related fees toward the upper end of the expected mid to high single-digit growth.

Finance: finalize the Q3 2025 expense forecast variance analysis by next Tuesday.