Aug. 1, 2012
/PRNewswire/ -- KeyBank N.A., a wholly owned subsidiary of KeyCorp (NYSE: KEY), announced two new strategic actions to further strengthen its consumer and commercial payments businesses. The moves create value for Key and its clients by providing differentiated solutions and service in support of Key's relationship strategy, while improving overall efficiency. The decisions complement Key's ATM and debit card agreements with MasterCard, made at the end of 2011.
Credit Card Purchase and Self-Issuance
Key has acquired Key-branded credit card assets from Elan Financial Services and will begin to self-issue credit cards. The decision is part of Key's strategy to mitigate the economic impact of recent regulatory changes on large financial institutions, diversify Key's revenue streams, and provide opportunities for future growth. The transaction closed today. Terms of the deal were not disclosed.
The acquired credit card portfolio of approximately 400,000 consumer and business accounts is comprised of current and former Key clients and approximately
in credit card assets. The clients hold balances of approximately
in deposits and
in loans at Key.
Merchant Services Processing Agreement
Key also today entered into an exclusive new arrangement for merchant services with Elavon, Inc. The new arrangement strengthens the more than 14-year relationship with Elavon, while providing Key the opportunity to more fully integrate merchant processing services into its overall payment solutions for business clients. In addition, with direct responsibility for new business, Key will be able to better affect a client's entire relationship and garner insights that drive optimal client solutions.
Decisions Complement ATM and Debit Card Agreements with MasterCard
According to KeyCorp Chairman and CEO
, both initiatives announced today strengthen an already strong payments platform and provide significant benefits to the company and its clients. At the end of 2011, Key signed agreements with MasterCard, regarding ATM and debit card branding and processing. The agreements position Key to meet its consumer clients' payments needs with industry-leading debit payment solutions and processing capabilities. They also improve overall operating efficiency and better align Key's expense base with the current environment. Implementation of the MasterCard agreements is expected to take place in the first half of 2013.
"The credit card acquisition and decision to begin self-issuance strengthens our product offerings, enhances the client experience, and will position us to grow revenue," said Mooney. "It's our relationship banking model in practice. Owning the entire client relationship, including credit cards, allows us to see our clients' full financial picture and tailor products and services to meet their needs. Our clients will also benefit as we more fully integrate our card offerings into Key Relationship Rewards next year."