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KeyCorp Announces Strategic Actions To Complete Transformation To Nationwide Financial Services Company

Restructuring charge of $100 million will complete redesign of national

office distribution, setting stage for single nationwide bank in 1997
 New 12 million-share stock buyback authorized

CLEVELAND, Nov. 25 /PRNewswire/ -- KeyCorp (NYSE: KEY) today announced the following strategic actions it will undertake in the next year to complete its transformation to a nationwide, bank-based financial services company:

* Formation of a single nationwide bank from Key's current network of

12 banks in 14 states and four regions of the United States.

* Consolidation of nearly 140 of its branch offices, known as KeyCenters,

into other KeyCenters.

* Reduction of approximately 2,700 positions, or 10 percent of its

employment base.

As a consequence of these actions, KeyCorp plans to take a fourth quarter 1996 restructuring charge of $100 million.

KeyCorp also announced its intention to sell slightly more than 140 KeyCenters in primarily rural areas.

KeyCorp further indicated that its Board of Directors authorized a new share buyback program, effective immediately, whereby up to 12 million shares may be repurchased by the end of 1997.

The nationwide bank to be formed in 1997 will give Key two national delivery vehicles. The new bank's business lines will emphasize community and corporate banking products and services, and will complement the delivery on a nationwide basis of consumer finance products through KeyBank USA, which will remain as a separate company. The resulting customer delivery system will not only be more closely aligned with customer preferences and Key's strategic direction, but will also be significantly more cost efficient. Corporate support functions will be reorganized to become more responsive to the needs of clients and customer-contact personnel.

KeyCorp management anticipates that the actions announced today will result in annualized earnings benefits of approximately $110 million by the end of 1997. When added to expense reduction programs outlined earlier this year, Key believes it has taken the major steps necessary to achieve its previously-announced efficiency ratio target of 55 percent by the end of 1997, with further improvement thereafter.

"These are bold steps that will complete the process we launched 18 months ago to transform Key into a nationwide financial services provider," said Robert W. Gillespie, chairman, president and chief executive officer.

"We are delighted with the progress we've made since March 1995, under our First Choice 2000 plan of focusing on our principal lines of business, significantly enhancing marketing and technology resources, and positioning Key as a national competitor," said Gillespie. "These actions will accelerate our schedule for completion of these tasks and position Key among the top-performing financial services companies in terms of both productivity and earnings growth."

Key's transformation of its multi-state office network is aimed at specializing its KeyCenters around target customer segments and serving its communities, as well as preparing the franchise for full interstate banking in the U.S. in 1997. The approximately 1,000 KeyCenters remaining after the actions announced today will continue to undergo enhancements in terms of staff and product specialization, technology additions, and design changes to fit the lifestyles and needs of the target customer groups they serve. These efforts will be supplemented by continued investment in Key's Telebanking Centers and Electronic Commerce units, which have proven to be especially popular among customers.

The workforce reduction will be distributed throughout KeyCorp and its regions, and be represented in all job levels. Affected employees will be eligible for other open positions within the company or be offered separation assistance.

The major components of the planned fourth quarter charge are expected to be as follows:
 Branch Consolidation $20 million
 Separation Assistance 52 million
 Technology Write-offs 28 million
 TOTAL $100 million

The technology write-offs reflect Key's accelerated plans for organizing as a single nationwide bank, versus the current 12-bank, four region banking group. Several minor systems are utilized exclusively to support a multi-bank organization and would no longer be required.

KeyCorp is one of the nation's largest financial services companies with assets of about $65 billion. Through three principal lines of business -- corporate banking, consumer finance, and community banking -- the Cleveland-based company provides retail and wholesale banking, investment, financing, and money management services to individuals and companies across the U.S. Key companies have a presence in 44 states from Maine to Alaska, including its network of KeyCenters, 1,800 ATMs, affiliate offices, and four telebanking centers (1-800-KEY2YOU) that provide financial products and
services 24 hours a day, every day of the year. KeyCorp's Web site can be found at

Private Securities Litigation Reform Act of 1995

Forward Looking Statements Disclosure

This press release contains forward looking statements. Actual results could differ materially from such statements for a variety of factors including: (1) delays in obtaining, or inability to obtain, necessary regulatory approvals in connection with merging of banks or consolidation or sale of branches or otherwise, (2) inability to enter into or delay in entering into satisfactory sales transactions in connection with contemplated branch divestitures, (3) significant customer losses in connection with branch consolidations (4) adverse revenue impact from employee reduction or consolidation of branches, (5) unanticipated delays in implementing or inability to achieve contemplated employee reduction, or (6) changes in laws, accounting, tax or regulatory practice or requirements.

 -0- 11/25/96

/CONTACT: Media, John Fuller, 216-689-8140, or Bill Murschel, 216-689-0457, or Analysts, Lee Irving, 216-689-3564, or Laurie Counsel, 216-689-4911, all of KeyCorp/

/KeyCorp's press releases available through Company News On-Call by fax, 800-758-5804, ext. 804350, or at


CO: KeyCorp ST: Ohio IN: FIN SU: RCN

BG-CS -- CLM005 -- 3478 11/25/96 08:26 EST
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Publication:PR Newswire
Date:Nov 25, 1996
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