KeyCorp reports fee-business gains as it pushes into European advisory

KeyCorp reported further growth in fee-generating businesses in the second quarter, with investment banking pipelines up 9% from the prior quarter and assets under management reaching $74 billion. The figures, disclosed by the Cleveland-based bank in earnings materials Tuesday, point to continued investment in advisory, payments and wealth management as it expands its middle-market banking presence in the United States and abroad.

Chairman, CEO and President Chris Gorman said in the company’s earnings release that KeyCorp made progress across investment banking, commercial payments and wealth management. A company presentation said those three priority fee businesses grew 8% in the first half compared with the same period in 2025.

Commercial payments produced double-digit fee growth over the past year, according to Gorman. The bank’s wealth management assets under management reached a company record of $74 billion, he said.

On the earnings call, Gorman said client activity remained firm despite a less certain economic backdrop. “While the macroeconomic environment remains uncertain, our momentum continues to be strong,” he said, according to the call transcript. He added that KeyCorp was seeing “healthy client engagement” and “solid activity levels” across its businesses.

European advisory expansion

KeyCorp is also preparing to extend its investment banking advisory business into Western Europe through the planned purchase of Clearwater UK, a United Kingdom-based middle-market investment banking advisory firm. The bank announced the transaction in April and said at the time that completion was subject to regulatory approvals and other customary closing conditions.

KeyCorp said in its April release that the deal is expected to close in the second half. The company framed the acquisition as a way to broaden financial advisory services for institutional clients, particularly in mergers and acquisitions.

Gorman referred to the planned acquisition on Tuesday’s call as “a strategic extension” of KeyCorp’s middle-market advisory business. He said it would expand the bank’s ability to serve M&A clients and prospects internationally.

KeyCorp operates consumer and business banking through KeyBank National Association across 15 states. Its KeyBanc Capital Markets unit provides corporate and investment banking products to middle-market companies in selected industries across the United States.

Middle-market push in US regions

The bank has also been adding commercial banking capacity in selected U.S. markets. In May, KeyCorp said it had hired local bankers in Southeast Michigan to expand middle-market commercial banking in that region.

In March, the company announced a five-person middle-market commercial banking team in Atlanta. KeyCorp said that launch followed the introduction of similar teams in Chicago, Southern California and Overland Park, Kansas.

Gorman said on the call that the bank had expanded its core middle-market business into cities where it had not previously operated. The strategy pairs local commercial bankers with broader capital markets, payments and advisory capabilities, allowing the bank to pursue operating companies that may need lending, treasury services or transaction advice.

Chief Financial Officer Clark Khayat said KeyCorp now expects average commercial loans to rise 8% to 10% this year. He attributed the higher outlook to loan growth in the first half, additional client relationships and commercial loan pipelines that the company expects to support growth in the second half of 2026.

This story draws on original reporting from PYMNTS.