The Federal Reserve on Thursday said it has approved a request by the Bank of Nova Scotia (Scotiabank) to increase its minority investment in the parent of KeyBank from 4.93 percent to up to 14.99 percent.
The Federal Reserve’s Thursday announcement also completes the regulatory process on the minority purchase that both Cleveland, Ohio–based KeyCorp (NYSE: KEY) and the Bank of Nova Scotia (NYSE: BNS) announced on Aug. 12, KeyCorp said in its Friday announcement on the topic.
KeyBank operates branch locations across upstate New York and is the No. 2 ranked bank by deposit share in the 16-county Central New York region.
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“We are pleased to receive final regulatory approval from the Federal Reserve to complete the strategic minority investment we announced in August,” Chris Gorman, chairman and CEO of KeyCorp, said in the banking company’s Friday announcement on the topic. “We have already seen meaningful results from the first tranche of this investment as we continue to strengthen our strategic position. Completing this transaction will create additional capacity for growth, enabling further investments in targeted scale across our franchise.”
KeyCorp on Aug. 30 had announced that Scotiabank had completed the initial purchase of KeyCorp’s common stock with an investment of about $800 million, meaning the Canadian bank owned about 4.9 percent of KeyCorp’s common stock.
Under the Aug. 12 announcement, Scotiabank said it would make a total investment of about $2.8 billion, representing about 14.9 percent pro forma common stock ownership, for a fixed price of $17.17 per share.
The banking companies in the Aug. 30 announcement said they expected approval on the additional $2 billion purchase in the first quarter of 2025, but on Thursday, that approval happened earlier than expected.
KeyCorp’s stock price closed at $18.13 on Friday. Its shares have increased more than 24 percent in value, year to date, versus more than 27.5 percent for the S&P 500 Index in the same period.
About the banks
KeyCorp describes itself as one of the nation’s largest bank-based financial services companies, with assets of about $190 billion as of Sept. 30, 2024. It is the parent company of KeyBank, which operates in 15 states under the name KeyBank National Association through a network of about 1,000 branches and about 1,200 ATMs, according to its Friday announcement.
The Bank of Nova Scotia has assets of about $1.4 trillion (as of Oct. 31, 2024). Scotiabank is described as one of the largest banks in North America by assets, and trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS), per the KeyCorp announcement.
