The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: I wanted to follow up on Peter's question, Don, on net interest income sensitivity. I just wanted to clarify that $50 million to $60 million for each
25 basis points does include a 30% beta, and therefore, what you're telling us is in reality, there's going to be -- the first few rate hikes should be,
in theory, higher than this $50 million to $60 million?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Got it. And what -- can you remind us of the $25 billion you have in A/LM swaps? What the maturity profile looks like? And given expectations for
a tightening cycle that goes through 2023, what are your plans to replace maturing swaps the debate in terms of capturing more of the rate
sensitivity versus replacing the swaps for -- to protect your NII in the future?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Got it. And if I could sneak one last one for Chris. So Chris, I feel like during this earnings season, CEOs are in 2 camps: those that are letting the rate
hikes fall to the bottom line and those that are investing the rate hikes. The way Don explained your expense outlook, clearly, there are Key-specific
idiosyncrasies. Your strategy is loud and clear that you invest back in the franchise and you pay for increased client activity.
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JANUARY 20, 2022 / 1:00PM, KEY.N - Q4 2021 KeyCorp Earnings Call
But as we think about a year without PPP noise and good loan growth and rate hikes, how should we think about positive operating leverage at
Key? In other words, are you going to allow more of those rate hikes to drop to the bottom line and therefore, positive operating leverage actually
widens as we get further into the rate cycle? Or do you feel like you can keep positive operating leverage stable and take that opportunity to invest?
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