KeyCorp (NYSE:KEY) Q2 2023 Earnings Call Transcript

Chris Gorman: I wouldn’t say, it’s not open at all. The reason I would put that caveat is, I’ve yet to see the new capital rules. But what I’m saying is, I’m very comfortable with our dividend payout and the trajectory of our business under the current construct.

Steven Alexopoulos: Got it. Okay. That’s helpful. And then on the fee income guide, I heard the messaging around green shoots and capital markets. But are those really needed to get us to this range, right, the up 4% to 6% and then — sorry, up 2% to 4% and then 4% to 6%? Are there other factors, which give us some cushion, if the IDDs fees don’t come back, that you could still deliver on the fee income guide?

Chris Gorman: There’s other areas where we have cushion, but I mean, investment banking fees are a big component of that. And we need to have more trajectory in the back half of the year on investment banking fees than we did in the front half of the year in order to hit these numbers.

Steven Alexopoulos: Got it. Okay. And then finally, just a big picture view. Obviously, a lot of questions about NIM, I’m just as surprised as Mike seeing 2/12. For Clark, how do you think about managing the balance sheet and interest rate risk differently so you don’t get in this situation again where the NIM is this low dividend payout ratio that’s high, you’re missing on the NII guidance, which is really all tied to what we’re seeing on the swaps? But how do you think about big picture? So once you do get into a 3% NIM range that you sort of hang around there? Thanks.

Clark Khayat: Yeah. It’s a great question. I think — and it probably requires a longer answer. But short story, Steve, I think you just have to be probably considering a variety of additional scenarios and being a little bit more dynamic in the direction and pace of rate movements. So I think if rates had moved in an orderly fashion, this would be much less of an issue. They did not, as you know, and I think we just have to be more dynamic in our thinking about putting on certain positions.

Steven Alexopoulos: Got it. Okay. Thanks for taking my questions.

Operator: Thank you. And there are no further questions in queue at the time. I’ll turn it back to Mr. Gorman.

Chris Gorman: Well, thank you so much, operator. Thank you for participating in our call today. If you have any follow-up questions, you can direct it to our Investor Relations team, 216-689-4221. This concludes our remarks. Thank you, everybody. Have a good afternoon or good morning.

Operator: Thank you. And ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Event Conferencing. You may now disconnect.