UBS Warburg Financial Services Conference

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UBS WarburgFinancial Services Conference
April 29, 2003
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PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 FORWARD-LOOKING STATEMENT DISCLOSURE
The presentation and discussion, including
related questions and answers, and presentation
materials, contain forward-looking statements
about issues like anticipated second quarter and
full-year 2003 earnings, anticipated level of net
loan charge-offs and nonperforming assets and
anticipated improvement in profitability and
competitiveness. Forward-looking statements by
their nature are subject to assumptions, risks
and uncertainties. Actual results could differ
materially from those contained in or implied by
such forward-looking statements for a variety of
factors including changes in interest rates
continued weakness in the economy, which could
materially impact credit quality trends and the
ability to generate loans failure of the capital
markets to function consistent with customary
levels delay in or inability to execute
strategic initiatives designed to grow revenues
and/or manage expenses consummation of
significant business combinations or
divestitures new legal obligations or
restrictions or unfavorable resolution of
litigation further disruption in the economy or
the general business climate as a result of
terrorist activities or military actions and
changes in accounting, tax or regulatory
practices or requirements.
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Progress on Initiatives

• Strengthened management team
• 4 of 8 senior positions changed since 5/01
• Improved expense discipline
• Total PEG saves of 250 million
• Relatively flat expenses for past 4 years
• Refocused on relationship businesses
• Reduced nonrelationship loans by approximately
  3.7 billion since 5/01

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Strategic Priorities

• Grow revenue
• Increase commercial loans
• Focus on profitable deposit growth
• Improve cross-sell
• Align capital market businesses
• Maintain expense discipline
• Improve credit quality

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Consumer Banking Initiatives

• Deposit growth
• Rolled out Free Checking
• Offering competitive deposit rates
• Increase cross-sell
• Licensing RMs to sell investments
• New client acquisition
• Added 125 new RMs
• Adding new KeyCenters
• Identifying acquisition opportunities

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Retail Banking Markets
Map Legend
KeyCorp
WA
ME
MT
ND
MN
OR
VT
NH
ID
WI
NY
MA
SD
RI
MI
CT
WY
PA
IA
NE
NJ
OH
DC
DE
UT
MD
NV
IN
IL
CA
CO
WV
VA
KS
MO
KY
NC
TN
AZ
OK
AR
SC
NM
AL
GA
MS
TX
AK
LA
FL
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Retail Focus on Cross-sell
Retail Services per Household
2.92
2.86
2.81
2.63
2.59
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Corporate Finance Initiatives

• Revenue Growth
• Align commercial and investment banking
• Focus on obtaining appropriate returns for Keys
  capital
• Deposit Growth
• Cross-sell loans and deposits
• Focus on client specific segments
• Improve Credit Quality
• Align incentives with credit quality
• Maximize Key-led transactions

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Investment Management Services

• Expand cross-sell teams in High Net Worth
• Expand distribution for Victory
• Distribute mutual funds through KeyCenters
• Focus on cross-sell opportunities with brokerage
  and corporate customers
• Leverage existing WRAP relationships
• Focus on consultants and retirement programs

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Financial Review
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Financial Overview

• Revenue challenges in weak economy
• Strong expense management
• Growth in core deposits
• Continued focus on asset quality
• Strong capital position

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Net Interest Income
in millions
Investments Consumer Loans Commercial Loans
Net Interest Income (TE) Net Interest Margin (TE)
Average Earning Assets
Net Interest Income (TE)
71,981 72,579 72,083 72,554
73,424
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Average Loans
in millions
63,928
63,488
63,486
62,677
62,845
Change

1Q03 vs. 1Q02
Commercial 37,140 37,088 36,497 36,367 36,463
(1.8) Consumer 22,908 23,967 24,591 24,308
24,683 7.7 Exit Portfolios
Auto 2,499 2,041 1,705 1,371 1,135 (54.6)
Commercial 941 832 693 631 564 (40.1)
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Average Core Deposit Growth
in billions


Change 1Q03 vs. 1Q02 4Q02 1Q03
1Q02 4Q02 Noninterest
Bearing 8.6 9.9 9.8 14 (6) NOW MMDA
13.4 15.2 16.8 25 43 Savings Deposits 1.9 2.0 2.
0 5 13 CDs Under 100k 13.4 12.2 11.8
(12) (14) Total Core Deposits 37.3 39.3 40.4
8 12
Annualized
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Commercial Portfolio - Geography
Northeast 20
Northwest 27
Great Lakes 43
Rocky Mountain 10
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Commercial Portfolio- Credit Size

in millions
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Commercial Portfolio- Utilization Rate

Excludes Real Estate, Leasing and Commercial
Run-off portfolios
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Net Charge Offs/ Loans

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NPA / Loans and OREO

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Allowance to Total Loans

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Allowance to NPL

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Net Income by Line of Business
in millions
1Q02
1Q03
Investment Mgmt Services 11
Investment Mgmt Services 9
Corporate Investment Banking 52
Corporate Investment Banking 48
Consumer Banking 37
Consumer Banking 43
Change
1Q02
1Q03 Retail
Banking 54 62 8 15 Small
Business 21 22 1 5 Consumer Finance 6 12
6 100 Corporate Banking 59 51 (8) (14) Rea
l Estate Capital 36 30 (6) (17) Equipment
Finance 19 25 6 32 Investment Mgmt
Services 23 20 (3) (13)
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Tangible Equity to Tangible Assets
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Dividend Record
38 Consecutive Years of Increases
1.22
1.20
1.18
1.12
1.04
.94
.84
.76
.72
.64
.56
1993 1994 1995 1996 1997
1998 1999 2000 2001 2002
2003T
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Thinking Like An Owner

• Total insider ownership 7
• 77 of employees own Key shares
• 69 of employees have stock options
• Stock ownership guidelines
• CEO 6 x salary
• CEO direct reports 4 x salary
• Executive Council 2 x salary

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Summary

• New management team focused on improving
  performance
• Growing revenue
• Managing expenses
• Increasing deposits
• Improving asset quality
• Alignment of management and shareholder interests
• Strong dividend record

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Question and Answer