S&P changes KeyCorp, KeyBank to negative

Standard & Poor's said it revised its outlook on KeyCorp and its bank subsidiary, KeyBank NA, to negative from stable.

The agency also affirmed its ratings on the entities, including the BBB+/A-2 holding company issuer credit ratings on KeyCorp and the A-/A-2 issuer credit ratings on KeyBank.

"The negative outlook is based on our view that although the acquisition of First Niagara Financial Group Inc. will broaden KeyCorp's commercial and retail banking franchise into overlapping and adjacent markets, we believe the substantial size and scope of the acquisition introduces considerable execution and regulatory risks," S&P credit analyst Rian Pressman said in a news release.

In addition, the agency said it views First Niagara's risk profile as higher than that of KeyCorp, based on its history of aggressive growth by acquisition, inconsistent strategy and execution, and mediocre operating performance.

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