Scotiabank seeks to increase KeyCorp stake

Investing.com -- Bank of Nova Scotia is seeking to increase its ownership in KeyCorp to as much as 19.99%, up from its current stake of 14.99%, according to a regulatory filing.

The Canadian bank plans to acquire additional voting shares of the Cleveland-based lender, and thereby indirectly acquire voting shares of KeyBank National Association, KeyCorp's bank unit.

A KeyCorp spokesperson said the increase in stake does not indicate any changes in the nature of the relationship between the two banks.

The move came a week after KeyCorp announced a $1 billion share-repurchase program, which would increase existing shareholders' stake in the company.

Scotiabank and KeyCorp struck their initial agreement in August 2024, with the transaction completed in December of that year. Scotiabank invested about $2.8 billion in exchange for common-stock ownership of roughly 14.9%.

At the time of the initial investment, US regional banks were working to strengthen their capital bases and address unrealized losses due to asset-price mismatches, the issue that led to several regional-bank failures in 2023.

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