KeyCorp. (NYSE:KEY) Q4 2018 Earnings Conference Call - Final Transcript

Jan 17, 2019 • 09:00 am ET


KeyCorp. (NYSE:KEY) Q4 2018 Earnings Conference Call - Final Transcript


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Donald Kimble

the expected mid year closing and the gradual build up of our loan balances in the second half, it will also have a very modest impact on our full year loan growth, while adding slightly to our efficiency ratio in the first year, it does not change our commitment to reach our cash efficiency ratio targeted at the 54% to 56% in the second half of 2019. Overall, 2019 should be another good year for Key, building on our momentum with strong operating leverage, focused risk management and continuing EPS growth.

On the bottom of the slide are our long term targets. We are already operating within the range of three of the four measures and believe we will reach our efficiency ratio during the year. That said, we have significant upside remaining to improve returns and deliver value to our shareholders. I remain confident in our ability to continue to move toward the top tier of our peer group and believe over time, the market will recognize our progress and improved results.

I'll now turn the presentation back over to Beth.

Beth Mooney

Thanks, Don. And before moving to the Q&A, I'll make a few closing comments. Despite the volatility that was experienced late in the year, I am pleased with our results and the momentum we have and share Don's confidence in our outlook. Over the past several years, we have made incredible progress across our company and we have delivered a step change in our financial performance, and we are now approaching peer leading levels of return, while remaining disciplined with risk and capital.

In the fourth quarter, we increased our return on tangible common equity targets to 16% to 19%, and as Don pointed out, we remain on a path to achieve our long term target. Our stock valuation, however does not reflect our stronger performance, competitive positioning and improved risk profile. We continue to believe that Key offers a compelling investment opportunity, given our track record and focused on sound, profitable growth supported by a dividend yield of over 4%. I remain optimistic about Key's future, and I'm proud of the momentum and accomplishments of our team in 2018. And as we look forward, we are well positioned to grow revenue, to control and reduce expenses, manage risk, drive further efficiency improvement, and ultimately drive higher returns for our shareholders.

I will now turn the call back over to the operator for instructions for the Q&A portion of our call. Operator?