Company: KEY-PI
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000091576-25-000110
Chunk: 119

Company: KEYCORP /NEW/
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 2
Chunk 119
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 $51 $1 $(7)$45 Counterparty Credit RiskWe hold collateral in the form of cash and highly rated securities issued by the U.S. Treasury, government-sponsored enterprises, or GNMA. Cash collateral of $54 million was netted against derivative assets on the balance sheet at June 30, 2025, compared to $75 million of cash collateral netted against derivative assets at December 31, 2024. The cash collateral netted against derivative liabilities totaled $121 million at June 30, 2025, and $124 million at December 31, 2024. Our means of mitigating and managing exposure to credit risk on derivative contracts is described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 144 of our 2024 Form 10-K under the heading “Counterparty Credit Risk.”The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our net exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.Dollars in millionsJune 30, 2025December 31, 2024Interest rate$95 $58 Foreign exchange66 81 Commodity149 170 Credit— — Other14 15 Derivative assets before collateral324 324 Plus(Less): Related collateral(54)(75)Total derivative assets$270 $249 We enter into derivative transactions with two primary groups: broker-dealers and banks, and clients. Given that these groups have different economic characteristics, we have different methods for managing counterparty credit exposure and credit risk.We enter into transactions with broker-dealers and banks for various risk management purposes. These types oftransactions are primarily high dollar volume. We enter into bilateral collateral and master netting agreements withthese counterparties. We clear certain types of derivative transactions with these counterparties, whereby centralclearing organizations become the counterparties to our derivative contracts. In addition, we enter into derivativecontracts through swap execution facilities. Swap clearing and swap execution facilities reduce our exposure tocounterparty credit risk. At June 30, 2025, we had gross exposure of $209 million to broker-dealers and banks and a net exposure of $47 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $41 million after considering $6 million of additional collateral held in