KeyCorp remains committed to cutting costs as it works to lower its cash efficiency ratio to a range of 54% to 56% by the end of 2018, an executive said.
The Cleveland-based bank, with $137.05 billion in assets, posted a 62.9% cash efficiency ratio for the first quarter of 2018. CFO Donald Kimble said the bank will close 40 branches, or about 3.5% of its fleet, in 2018 alone. Speaking at a June 12 industry conference, Kimble said KeyCorp has planned cost reductions in a number of areas. He said growing a business and cutting costs are "not mutually exclusive."
The bank's 2016 acquisition of First Niagara Financial Group Inc. helped uncover areas where the bank can be more efficient, Kimble said. "We are combining and rightsizing teams, we are streamlining our operations, and we are optimizing our staffing levels through normal attrition and other efforts," he added.
Management also commented on recent regulatory relief legislation. President of Banking Christopher Gorman said KeyCorp has not noticed "any huge change" in how it runs its business. But he said the bank expects to reap some benefits, including a slowdown in the rate of new regulations, a lower cost of compliance and more capital management flexibility.
"As new regulations come out, it takes a whole lot of work and a whole lot of teamwork to decipher what they are and to implement them," Gorman said. "So a slowdown in [the] rate of new regulation is important."
