KeyCorp Will Wait for TARP Repayment
P/>NEW YORK (TheStreet) -- KeyCorp (KEY) - Get Report's CEO indicated that the bank will wait for the results of the second stress test before repaying the money it still owes to the U.S. government following the 2008 financial crisis.
"We feel we will do
well on that test," CEO Henry Meyer III said at the Goldman Sachs Financial Services 2010 Conference on Wednesday. "We have been talking with the regulators about what the right timing is and we are committed to a shareholder friendly repayment, which means raising as little as equity as we can."
In 2008 KeyCorp received $2.5 billion from the U.S. Treasury Department's Troubled Asset Relief Program (TARP).
Going forward, KeyCorp management expects that it will be focused on expanding its community banking organically and through acquisitions.
"There will be more
small community bank consolidation and it will play into Key's geography, its strategy and rebound," Meyer said.
Meyer, who plans to retire in May and will be replaced by Beth Mooney. Mooney said that she expects opportunities in small business and expects that most banks will, "challenge" free checking in the New Year. She also said that KeyCorp's exposure to the Durbin Amendment is $75 million dollars in total gross revenue.
"We don't know what the losses would be," said Mooney. "No one is suggesting it would go to zero or what would be at risk."
--Written by Maria Woehr in New York.
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