The banking stocks such as KeyCorp (NYSE:KEY) are finally out of the stress, which induced a rally in these stocks. The shares of KeyCorp gained 1.63% to settle at $14.31 during the previous trading session. The investors’ sentiment on the banking sector has improved from what it was last year. It was seen that the investors were increasingly exiting banking stocks for their unattractiveness. Moreover, better than anticipated employment data has boosted confidence of interest rate hike.
Stress test passed
The stress test results released recently point out that KeyCorp (NYSE:KEY) sufficiently maintains Tier 1 common capital ratio of 9.9% higher than 9.2% that it reported last year. Also, the ratio is comfortably higher than the mandate of 5% as prescribed by the Federal Reserve. Further, the latest jobs data indicate that the Fed may increase the rates soon, which will be a good development for the banking stocks.
Appointment of Danahy
Alongside a comfortable capital position, KeyCorp (NYSE:KEY) is also looking forward to strengthening its residential mortgage unit. In this direction, the bank has roped in Mark Danahy as President of its mortgage operations. Danahy joins the bank with his extensive experience of more than 25 years in the mortgage business. Before joining KeyCorp (NYSE:KEY), Danahy served Citigroup Inc (NYSE:C) in the capacity of managing director of its mortgage operation. Also, Danahy was president and CEO of PHH Mortgage.
Following the appointment of Danahy, KeyCorp (NYSE:KEY)’s co-president E.J. Burke elaborated on the experience of Danahy. Burke noted that Danahy has in-depth knowledge of the mortgage business, right from sales to servicing. He added that Danahy has the ability and imagination to frame fair, competitive and convenient mortgage solutions for the company’s customers spread across 12 states.
Meanwhile, KeyCorp (NYSE:KEY) is expecting low-to-mid single-digit growth in net interest income during 2015 as opposed to flat growth in 2014. It anticipates a slight uptick in Net Interest Margin (NIM) this year.