Bulletin: The Bank of Nova Scotia's Plan To Acquire Equity Interest In KeyCorp Advances U.S. Growth Strategy

TORONTO (S&P Global Ratings) Aug. 14, 2024--S&P Global Ratings today said The Bank of Nova Scotia's (BNS; A+/Stable/A-1) plan to acquire an approximate 14.9% equity interest in KeyCorp is consistent with the bank's strategy to deploy incremental capital in a low-risk manner and strengthen its position in North America. However, the size of the deal is relatively small (less than 5% additional earnings expected by 2026) and we remain uncertain, at this point, of potential synergies that BNS can achieve. BNS pointed to KeyCorp's strong middle market wholesale business and solid deposit franchise as key aspects of the investment. We view the deal as neutral to the credit rating, but we continue to monitor the bank's expansion into the U.S.

...August 14, 2024 TORONTO (S&P Global Ratings) Aug. 14, 2024--S&P Global Ratings today said The Bank of Nova Scotia's (BNS; A+/Stable/A-1) plan to acquire an approximate 14.9% equity interest in KeyCorp is consistent with the bank's strategy to deploy incremental capital in a low-risk manner and strengthen its position in North America. However, the size of the deal is relatively small (less than 5% additional earnings expected by 2026) and we remain uncertain, at this point, of potential synergies that BNS can achieve. BNS pointed to KeyCorp's strong middle market wholesale business and solid deposit franchise as key aspects of the investment. We view the deal as neutral to the credit rating, but we continue to monitor the bank's expansion into the U.S. BNS expects to invest approximately US$2.8 billion in two tranches. The first tranche will be an investment of about US$800 million for an approximately 4.9% interest in KeyCorp and is expected to close in fiscal fourth-quarter 2024. The...

Bulletin