Company: KEY-PI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000091576-25-000058
Chunk: 201

Company: KEYCORP /NEW/
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 8
Chunk 201
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 rate (spread), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price IndexCommercial real estateProperty & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFRCommercial lease financingBBB corporate bond rate (spread), GDP, and unemployment rateConsumerReal estate — residential mortgageGDP, home price index, unemployment rate, 30 year mortgage rate and U.S. household incomeHome equityHome price index, unemployment rate, and 30 year mortgage rateOther consumerUnemployment rate, prime rate and U.S. household incomeCredit cardsUnemployment rate and U.S. household incomeDiscontinued operationsUnemployment rate(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, utilization, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance. Economic OutlookAs of March 31, 2025, there is continued economic resiliency, but also unprecedented geopolitical uncertainty as a result of the recent changes to trade and other policies, which could add stress to the existing economic pressures.We utilized the Moody’s February 2025 Consensus forecast as the baseline forecast to estimate our expected credit losses as of March 31, 2025. This baseline scenario reflects slowing growth over the next two years. U.S. GDP is expected to grow at an annual rate of approximately 2% for 2025 and 2026. The expected National Unemployment Rate is forecasted to remain close to 4% over the next two years. The U.S. Consumer Price Index is forecasted at 2.6% for 2025. Current market conditions may not be fully captured in the baseline forecast as of the quarter-end. The geopolitical environment remains both uncertain and complex as a result of policy changes that could substantially impact global economies, including product and country specific tariffs, funding freezes and cuts to different government programs, federal layoffs, increased deportations and changes to immigration policy. These actions pose potential downside-risks to the economic outlook, although to what extent remains highly uncertain. These economic uncertainties were addressed through a qualitative reserve increase, which leveraged downside economic assumptions.As a result of the current economic uncertainty