S&P turns KeyCorp outlook to negative

S&P said it revised its outlook for KeyCorp and its subsidiary KeyBank NA to negative from stable and affirmed their BBB+ and A- ratings, respectively.

“Specifically, we believe that Key's balance sheet positioning amid currently higher interest rates will lead to near-term pressure on profitability as deposit betas (the portion of a change in interest rates that's passed on to depositors) rise and the funding mix shifts toward interest-bearing deposits and wholesale funding. The bank's capital ratios are also at the low end of the peer average and will need to rise if regulators tighten requirements for KeyCorp and its peers,” S&P said in a press release.

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