KeyBank Enhances Payments Business
CLEVELAND, Aug. 1, 2012 /PRNewswire/ -- KeyBank N.A., a wholly owned subsidiary of KeyCorp (NYSE: KEY), announced two new strategic actions to further strengthen its consumer and commercial payments businesses. The moves create value for Key and its clients by providing differentiated solutions and service in support of Key's relationship strategy, while improving overall efficiency. The decisions complement Key's ATM and debit card agreements with MasterCard, made at the end of 2011.
Credit Card Purchase and Self-Issuance
Key has acquired Key-branded credit card assets from Elan Financial Services and will begin to self-issue credit cards. The decision is part of Key's strategy to mitigate the economic impact of recent regulatory changes on large financial institutions, diversify Key's revenue streams, and provide opportunities for future growth. The transaction closed today. Terms of the deal were not disclosed.
The acquired credit card portfolio of approximately 400,000 consumer and business accounts is comprised of current and former Key clients and approximately $725 million in credit card assets. The clients hold balances of approximately $10.0 billion in deposits and $5.8 billion in loans at Key.
Merchant Services Processing Agreement
Key also today entered into an exclusive new arrangement for merchant services with Elavon, Inc. The new arrangement strengthens the more than 14-year relationship with Elavon, while providing Key the opportunity to more fully integrate merchant processing services into its overall payment solutions for business clients. In addition, with direct responsibility for new business, Key will be able to better affect a client's entire relationship and garner insights that drive optimal client solutions.
Decisions Complement ATM and Debit Card Agreements with MasterCard
According to KeyCorp Chairman and CEO Beth Mooney, both initiatives announced today strengthen an already strong payments platform and provide significant benefits to the company and its clients. At the end of 2011, Key signed agreements with MasterCard, regarding ATM and debit card branding and processing. The agreements position Key to meet its consumer clients' payments needs with industry-leading debit payment solutions and processing capabilities. They also improve overall operating efficiency and better align Key's expense base with the current environment. Implementation of the MasterCard agreements is expected to take place in the first half of 2013.
"The credit card acquisition and decision to begin self-issuance strengthens our product offerings, enhances the client experience, and will position us to grow revenue," said Mooney. "It's our relationship banking model in practice. Owning the entire client relationship, including credit cards, allows us to see our clients' full financial picture and tailor products and services to meet their needs. Our clients will also benefit as we more fully integrate our card offerings into Key Relationship Rewards next year."
Mooney continued, "The changing dynamics of the payments and debit card space today require new approaches and strategic innovation. Our arrangements with Elan, Elavon and MasterCard are consistent with our strategy and will allow us to deliver cost effective solutions."
Key traces its history back more than 160 years and is headquartered in Cleveland, Ohio. One of the nation's largest bank-based financial services companies, Key has assets of approximately $86.5 billion at June 30, 2012.
Key provides deposit, lending, cash management and investment services to individuals and small businesses through its 14-state branch network under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name.
For more information, visit https://www.key.com/. KeyBank is Member FDIC.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events many of which are inherently uncertain and outside of Key's control. Key's actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Factors that could cause Key's actual results to differ materially from those described in the forward-looking statements can be found in Key's Annual Report on Form 10-K for the year ended December 31, 2011, which has been filed with the SEC and is available on Key's website at www.Key.com/IR and on the SEC's website at www.sec.gov. Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management's views as of any subsequent date.
Key does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.