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Bank of Nova Scotia is looking to increase its stake in Cleveland-based KeyCorp to as much as 19.99 per cent, up from prior permission for a 14.99 per cent interest.
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Scotiabank plans to acquire additional voting shares of KeyCorp, and thereby indirectly acquire voting shares of the company’s bank unit, KeyBank National Association, according to a regulatory filing.
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The increase in stake does not indicate any changes in the nature of their relationship, according to a KeyCorp spokesperson. It came a week after KeyCorp announced a US$1 billion share-repurchase program, which would increase existing shareholders’ stake.
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“Approval of this application will not result in any changes to the existing agreement between Scotiabank and KeyCorp, and Key would not be subject to any additional regulation as a result of Scotiabank increasing its noncontrolling investment,” the spokesperson said in an emailed statement.
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Scotiabank representatives had no immediate comment.
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The two companies struck the initial agreement in August 2024 and completed the transaction in December of that year, with Scotiabank investing about US$2.8 billion in exchange for common-stock ownership of roughly 14.9 per cent.
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At that time, U.S. regional banks were working to strengthen their capital bases and relieve the pain of unrealized losses due to asset-price mismatches, the issue that led to several regional-bank failures in 2023.
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For KeyCorp, the deal came together as Scotiabank approached it with “a unique opportunity to raise capital on attractive terms,” though KeyCorp was comfortable with its capital position at the time, Chief Executive Officer Chris Gorman said then.
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English (US)