BancAnalyst

1
BancAnalyst Association of Boston November
7, 2003 Jack L. Kopnisky President Key
Consumer Bank
Michael Orsino National Sales Manager Retail
Banking, KeyCorp
2
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 fourth 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.
3
1
Net Income by Line of Business
Net Income - 3Q03

• Corporate Banking
• KeyBank Real Estate Capital
• Key Equipment Finance

Investment Management Services
Corporate Investment Banking40
10
Consumer Banking50

• Retail Banking
• Small Business
• Consumer Finance

4
2
Consumer Banking
Retail Banking Small Business Consumer Finance
Business Scale
900 KeyCenters - 2,200 ATMs On-line Clients
722,000 (37 Penetration) Small Business 10th
largest in loan balances
Business Initiatives

• Deposit growth
• Increase cross-sell
• New client acquisition
• Adding new KeyCenters and RMs
• Consumer Finance reposition and improve
  cross-sell
• Business Banking focus on business development

5
3
Consumer Bank Financial Performance
Financial Performance ( millions)
Growth Q303 vs. Q302
Q303
Q203
Q302
Revenue Provision for Loan Losses Expenses (Incl
Ovhd) Net Income Loans Deposits Transaction MM
/Savings CDs
580,997
576,864
6.8
616,102
64,754
70,171
-0.4
69,857
353,093
336,343
5.4
354,578
119,791
101,969
106,605
12.4
28,874
28,243
3.0
29,100
34,999
34,780
33,580
4.2
9,902
9,054
14.5
10,367
10,913
10,697
8,949
21.9
13,719
14,182
15,577
-11.9
6
4
Progress on Relationship Development
Relationship Development and Client Acquisition
Q303
Q203
Q302

Checking Balances ( in Millions) Retail
Banking Business Banking Net New Checking
Accounts Retail Banking Business
Banking MM/Savings Balances ( in
Millions) Retail Banking Business Banking Home
Equity Balances ( in Millions) Retail
Banking Net New Clients Retail Banking Business
Banking Accounts per Customer Retail
Banking Business Banking
13
6,871
6,707
6,074
3,116
2,865
2,652
17.5
30,174
10,071
(9,336)
NM
(469)
(556)
(738)
57
9,531
8,029
21
9,687
33
1,217
1,160
916
7,614
6,956
14
7,900
10,766
3,480
(16,047)
NM
1,103
820
26
1,030
2
3.05
3.03
3.00
2.84
2.70
7
2.88
7
5
Keys Relationship Approach
Foundation Elements
Distinctive Elements
Future State
Geography
Unique Client Experience
Client Knowledge
Segmentation


Channels
Service Advice
Consistent Shareholder Return
Products
Multiple Solutions
Human Capital
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6
Keys Relationship Approach
Foundation Elements
Geography
Segmentation
Channels
Products
Human Capital
9
7
Keys Relationship Approach
Geography
Foundation Elements

• Market Share Objective Top 4 Market Share
  Position
• Retail Infrastructure Investments 2000-2005 -
  162 Million
• Acquisition Strategy

Market Share

• Measures of Success
• Market Share Growth
• Market Earnings Growth

10
8
Keys Relationship Approach
Segmentation
Foundation Elements

• Profit Tier Segmentation
• Movement to Life Stage Segmentation

Customers
Profitability/Customers
June 1998
Dec 1999
June 1998
Dec 2000
Dec 2000
Dec 2002
Dec 2001
Dec 2001
Dec 1999
Dec 2002
Sept 2003
Sept 2003
P1
P2
P3
394
532
679
458
618
727
P4
P5
(121)
(104)
(143)
(111)
(133)
(129)

• Measures of Success
• Profitability/Client
• Profitability/Segment
• Net Client Growth

11
9
Keys Relationship Approach
Channels
Foundation Elements

• Client Choice of Channel
• Key Centers / McDonald Offices
• ATM
• Call Center
• Key.com

Client Satisfaction
Current Scale
The scale is 1-10 1 Very Dissatisfied 10
Very Satisfied

• Measures of Success
• Productivity
• Service Levels
• Client Satisfaction

12
10
Keys Relationship Approach
Products
Foundation Elements

• Broad Product Solutions for Consumers and
  Institutions
• Loan, Deposit, Investments, Fee-Based Services
• Relationship Pricing and Packaging

48 Increase this year
New DDA Account Opening

• Measures of Success
• Profitable Balance Fee Growth
• Product Economic Value Added (EPA)

13
11
Keys Relationship Approach
Human Capital
Foundation Elements

• Competency-Based Hiring
• Significant, Continuous Learning and Training
  Environment
• Differentiating for High Performance
• Meritocracy

Retail Turnover Ratio
-- Financial Objectives -- Behavior
Expectations -- EPA Driven Rewards

• Measures of Success
• Employee Satisfaction
• Retention/Turnover
• Diversity

14
12
Keys Relationship Approach
Distinctive Elements
Foundation Elements
Geography
Client Knowledge
Segmentation

Channels
Service Advice
Products
Multiple Solutions
Human Capital
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13
Keys Relationship Approach
Client Knowledge
Distinctive Elements
22 Increase During 3rd Quarter

• Investments in Enterprise
• Turn Data to Actionable Information
• CRM System

Retail Profit Production
3Q02
3Q03

• Measures of Success
• Sales Productivity
• Conversion Metrics

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14
Keys Relationship Approach
Service Advice
Distinctive Elements

• Defined Service Behaviors
• Relentless Consistency
• Proactive Advice

Annualized Attrition/Acquisition Grows

• Measures of Success
• Client Acquisition/Attrition
• Client Satisfaction

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15
Keys Relationship Approach
Multiple Solutions
Distinctive Elements

• Aggressive, Results Oriented
• Proactively Acquire Major Share of Wallet

Cross Sell Ratio

• Measures of Success
• Defined Sales Activities
• Cross Sell Ratio
• Share of Wallet

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16
Keys Relationship Approach
Distinctive Elements
Future State
Foundation Elements
Geography
Unique Client Experience
Client Knowledge
Segmentation


Channels
Service Advice
Consistent Shareholder Return
Products
Multiple Solutions
Human Capital
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17
Keys Relationship Approach
Future State

• Consistent Distinctive Service Experience
• Aggressive, Unrelenting Sales Culture
• Consumer Banking Growth Supporting
  Consistent Shareholder Returns
• 3-5 Revenue Growth
• 10 Earnings Growth
• ROE 21

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BancAnalyst Association of Boston November
7, 2003 Michael Orsino National Sales
Manager Retail Banking, KeyCorp
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18
Retain Expand Acquire

• Relentless Accountability - Daily reports
• Leaner more efficient structure
• More one-on-one coaching
• Retain/Recruit High Performers

22
19
KeyCorp Central New York
Results
DDA Growth 5X Bank Avg.
Loan Growth 2.9X Bank Avg.
12 Net Income Growth
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Question Answer Session Jack L.
Kopnisky President Key Consumer Bank
Michael Orsino National Sales Manager Retail
Banking, KeyCorp