KeyCorp CEO Chris Gorman goes one-on-one with Jim Cramer

Key Concepts:

• Regional Banks
• Resilience
• Re-shoring
• Balanced Regulation
• Safety and Soundness
• Capital Markets
• Liquidity
• Client-Centric Approach

Regional Banks and KeyCorp's Situation

The discussion begins with the challenges in the current market environment and the potential of regional banks. KeyCorp, the parent company of KeyBank, is highlighted as a domestic company less directly affected by tariffs, unless a full-blown recession occurs. The stock has declined from $20 in late November to $13 due to broader economic worries, despite the company not yet releasing earnings.

KeyCorp's 200th Anniversary and Resilience

KeyCorp is celebrating its 200th anniversary. The Chairman, President, and CEO, Mr. Gorman, emphasizes the importance of resilience, taking advantage of market opportunities, and positioning the bank through various conditions. He notes that in 1825, there were only 24 states and 11 million people in the U.S., providing historical context.

Liquidity, Capital, and Client Focus

Mr. Gorman stresses that resilience starts with strong liquidity and capital, which KeyCorp possesses. He also highlights the importance of a client-centric approach and taking a long-term view.

Re-shoring and American Companies

The conversation shifts to the potential for American companies to benefit from re-shoring trends, especially in light of COVID-19-related supply chain disruptions. Mr. Gorman agrees that re-shoring is a real possibility, with many customers considering how to restructure their supply chains, potentially leading to more activity in the United States.

Ohio's Economic Transformation

The discussion addresses the economic changes in Ohio, acknowledging the decline in factories but highlighting growth in sectors like medicine, pharmaceuticals, and finance. Mr. Gorman mentions successful efforts to attract companies to Ohio, citing investments from Intel, Google, and Amazon. Ohio is ranked as the second-best place to do business, attributed to the state's business environment.

Bank of Nova Scotia Partnership

The partnership between KeyCorp and Bank of Nova Scotia is discussed. Bank of Nova Scotia sought more exposure to the U.S. middle market, wealth management, and capital markets, making KeyCorp a good fit.

Regulation and the Banking Industry

The conversation turns to regulation, with concerns about over-regulation and the multiple regulators overseeing banks. Mr. Gorman expresses optimism that regulators will focus on safety and soundness rather than excessive processes and procedures. He believes this could lead to increased lending opportunities. He advocates for balanced regulation that ensures safety and soundness while providing regulatory relief on non-essential aspects.

Conclusion

The interview concludes with a positive outlook on KeyCorp and the banking industry, emphasizing the importance of resilience, re-shoring, and balanced regulation. The interviewer expresses support for KeyCorp and its yield, questioning the recent decline in bank stocks.