KeyCorp (NYSE: KEY) has reported robust financial results for the third quarter of 2025, surpassing market expectations and setting a positive tone for future growth. The results reflect the company’s strong execution, operational efficiency, and renewed momentum across key business segments.
Net Interest Margin Expands to 2.75% as Revenue Tops $1.9 Billion
KeyCorp’s third-quarter 2025 financial results have significantly outperformed market expectations, with the company reporting a net income of $454 million, or $0.41 per diluted common share. This result exceeds the anticipated earnings per share (EPS) of $0.38. The company’s revenue for the quarter reached $1.9 billion, surpassing the expected $1.88 billion. This represents a 17% increase year-over-year, adjusted for last year’s securities portfolio repositioning.
Net interest income was a key driver of this performance, increasing by 4% quarter-over-quarter, with a net interest margin of 2.75%, up by 9 basis points. The increase in net interest income reflects lower deposit costs and the strategic reinvestment into higher-yielding assets. Average deposits grew by 2% quarter-over-quarter, while total deposit costs declined by 2 basis points to 1.97%.
In comparison to the third quarter of 2024, KeyCorp’s performance has shown a dramatic turnaround. Last year, the company reported a net loss of $447 million, or $(0.47) per diluted common share, due to significant after-tax charges. The current year’s positive results highlight the effectiveness of KeyCorp’s strategic initiatives and its ability to leverage market opportunities to enhance profitability.
KEY Targets Higher Returns and Margin Stability in Coming Quarters
Looking ahead, KeyCorp has set a confident tone for its future financial performance. The company is on track to achieve record revenue in 2025, with an emphasis on continuing its momentum in EPS growth. KeyCorp’s strategic focus includes active management of its business and balance sheet, aiming to achieve a 15% or better return on tangible common equity within the next few years.
The company’s investment banking and debt placement fees have shown strong performance, recording the second-best year-to-date results in KeyCorp’s history. This growth is supported by an expanding investment banking pipeline, including a significant increase in mergers and acquisitions activity. Additionally, assets under management have reached a record $68 billion, reflecting an 11% increase year-over-year.
KeyCorp remains committed to delivering best-in-class services while managing risk effectively. The company has reported a decline in nonperforming assets and criticized loans, with net charge-offs remaining stable. This focus on credit quality, combined with strategic investments in technology and personnel, positions KeyCorp for sustained growth and profitability in the coming quarters.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.All stock prices were quoted at the time of writing.