SYRACUSE — KeyBank’s plan to close as much as 5 percent of its nationwide branch network over the next 18 months isn’t likely to hit Central New York too hard, the bank’s local leader says. The branch closings will probably have an “incremental” impact locally, says Stephen Fournier, president of KeyBank’s Central New York district. […]
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SYRACUSE — KeyBank’s plan to close as much as 5 percent of its nationwide branch network over the next 18 months isn’t likely to hit Central New York too hard, the bank’s local leader says.
The branch closings will probably have an “incremental” impact locally, says Stephen Fournier, president of KeyBank’s Central New York district. He notes the bank has worked steadily to keep its area branches in line with business conditions.
Key closed a location in Dannemora (near Plattsburgh) earlier this year, for example. Based in Cleveland, Ohio, Key has more than 1,000 branches in 14 states and assets of more than $87 billion.
The bank has looked to invest in Central New York in the past and will continue to do so, Fournier says. KeyBank is currently adding a new branch office in Manlius and has relocated branches in Cazenovia and Fayetteville to new sites in recent years.
Fournier declined to discuss any specific details of local branch closings or job cuts. When branches do close, the bank tries to find positions for affected employees elsewhere within Key, he says.
Closing some locations will help Key reposition its network to better fit where customer traffic and population trends are headed, Fournier adds.
“We’re pretty pleased as far as where we are,” he says of Key’s Central New York business. “We’re pretty bullish in light of demand and what’s going on nationally.”
The bank has continued to see loan growth and improving credit quality, he says.
The branch closures are part of a broader effort at KeyCorp (NYSE: KEY) to save the banking company $150 million to
$200 million in expenses by the end of 2013. The company announced the initiative when it released its second-quarter earnings on July 19.
The cost-cutting moves will also include a focus on organizational design and strategic sourcing, according to Key.
“This is a proactive and purposeful response to the changes that continue to take place in our industry,” Key Chairwoman and CEO Beth Mooney said during a conference call on the company’s second-quarter results.
The effort will help Key become more efficient and allow the bank to respond more quickly to changes in its markets, she added.
“In the face of the present environment, we recognize the need to rationalize branches while repositioning them in a way that allows us to provide convenience for customers where they are,” William Koehler, president of Key’s community bank operations, said during the conference call.
The bank will continue to invest in priority markets, he added. Key has already taken steps to close 17 branches as part of the cost-cutting effort, he said.
KeyBank is number two in the Syracuse–area deposit market with 28 branch offices, more than $1.7 billion in deposits, and a market share of more than 16 percent. In the Utica–Rome area, Key has two branches, more than $64.4 million in deposits, and a deposit market share of more than 1.7 percent, according to the latest statistics from the Federal Deposit Insurance Corp.
For the second quarter, Key generated net income from continuing operations attributable to common shareholders of
$221 million in the second quarter, down from $243 million a year earlier.
Earnings per share for the period totaled 23 cents, down from 26 cents in the second quarter of 2011.
During the quarter, Key completed an acquisition of 37 HSBC locations in the Buffalo and Rochester markets.