Driving for Top-Tier Performance

1
Retail Banking at Key Financial Services
Analysts Association Newport, Rhode Island June
18, 2003 Patrick J. Swanick, President, Retail
Banking Electronic Services
2
Retail Banking
Retail Banking InitiativesRevenue, Revenue,
Revenue,
(Expense)

• Deposit growth
• Rolled out Free Checking Nationwide
• Offering competitive deposit rates
• Introduced KeyMiles Continental Airlines Debit
  Card

3
Retail Banking
Free Checking, with KeyMiles Debit Card
4
Retail Banking
Debit Card Revenue Growth
in millions
1996
1997
1998
1999
2000
2001
2002
2003 Forecast

• 4 Small Business and 8 Consumer MasterCard
  Debit Issuer Nationwide
• Percentage of Active Users and Transactions per
  Cardholder Exceed National Averages

5
Retail Banking
Retail Banking InitiativesRevenue, Revenue,
Revenue, (Expense)

• Deposit growth
• Rolled out Free Checking Nationwide
• Offering competitive deposit rates
• Introduced KeyMiles Continental Airlines Debit
  Card

• Increase cross-sell
• Licensing RMs to sell investments
• Certifying RMs to handle small business clients

• New client acquisition
• Added new RMs and BDOs
• Adding new KeyCenters and ATMs
• Identifying acquisition opportunities

6
Total Revenue (TE) by Line of Business
Retail Banking
in millions
1Q02
1Q03
Investment Mgmt Services 18
Investment Mgmt Services 17
Corporate Investment Banking 35
Corporate Investment Banking 34
Consumer Banking 49
Consumer Banking 47
Change
1Q02
1Q03 Retail
Banking 311 320 9 3 Small
Business 90 94 4 4 Consumer
Finance 150 150 - - Corporate
Banking 249 234 (15) (6) Real Estate
Capital 90 84 ( 6) (7) Equipment Finance 66 71
5 8 Investment Mgmt Services 213 192 ( 21) (10)
7
Net Income by Line of Business
Retail Banking
in millions
1Q02
1Q03
Investment Mgmt Services 9
Investment Mgmt Services 11
Corporate Investment Banking 48
Corporate Investment Banking 52
Consumer Banking 43
Consumer Banking 37
Change
1Q02
1Q03 Retail
Banking 54 62 8 15 Small
Business 21 22 1 5 Consumer Finance 6 12
6 100 Corporate Banking 59 51 (8) (14) Rea
l Estate Capital 36 30 (6) (17) Equipment
Finance 19 25 6 32 Investment Mgmt
Services 23 20 (3) (13)
8
Retail Banking
Average Core Deposit Growth
in billions

Change 1Q03 vs. 1Q02 4Q02 1Q03
1Q02 4Q02 Noninterest
Bearing 8.6 9.9 9.8 14 (6) NOW MMDA
13.4 15.2 16.8 25 43 Savings Deposits 1.9 2.0 2.
0 5 13 CDs Under 100k 13.4 12.2 11.8
(12) (14) Total Core Deposits 37.3 39.3 40.4
8 12
Annualized
9
Average Loans
Retail Banking
in millions
63,488
63,928
63,486
62,677
62,845
Change

1Q03 vs. 1Q02
Commercial 37,140 37,088 36,497 36,367 36,463
(1.8) Consumer 22,908 23,967 24,591 24,308
24,683 7.7 Exit Portfolios
Auto 2,499 2,041 1,705 1,371 1,135 (54.6)
Commercial 941 832 693 631 564 (40.1)
10
Retail Banking
Overview
902 KeyCenters 2,179 ATMs 1-800-KEY-2-YOU Key.com
12 State Footprint 2.2 Million Clients 6,100
Employees 1.3 Billion Revenues
11
Retail Banking
Strategic Priorities for 2003

• RETENTION
• Retain All Clients/Relationships
• Keep All High Performing Employees

• EXPANSION
• Drive Deeper Cross-Selling
• Foster 1Key Leadership

• ACQUISITION
• Attract New Relationship Clients COIs
• Actively Recruit New High Potential Employees

12
Retail Banking
KeyCenter Network Summary
13
Retail Banking
New Customer Acquisition
Projected Customer Growth with Acquisitions
Projected Organic Customer Growth
(Millions)

• Selected Initiatives Supporting Acquisition
• Multiple new product introductions (Free
  Checking, Continental/Key Miles Debit Card,
  Relationship Mortgage, Home Loan First, Student
  Checking, etc.)
• Increased marketing spend, with clear, forceful
  messages
• More KeyCenters ATMs Grand Re-Openings of
  newer KeyCenters
• Added sales capacity More RMs, SSAs, BDOs,
  COIs TeleSales staff
• Additional strategic bank acquisitions (like UBT)

14
Retail Banking
Client Retention
Annual Attrition Rate

• Selected Initiatives Supporting Retention
• Enhanced client contact strategy through
  KeyCenter and Outbound TeleSales Staffs and
  Direct Mail
• Harland Modeling Likely to Attrite scores
• Fee changes/modifications
• Expanded KeyCenter hours

15
Retail Banking
Client Satisfaction Grows
Historical Scale
Current Scale
8.92
8.99
1Q 2003
Aggregate hospitality scores for Keys branch
network. The scale is 1-5 1 Strongly
Disagree 5 Strongly Agree
The scale is 1-10 1 Very Dissatisfied 10
Very Satisfied
16
Retail Banking
Relationship Building
Profit Contribution per Customer
17
Retail Banking
Focus on Cross-Sell
Retail Services per Household
2.92
2.86
2.81
2.63
2.59
18
Retail Banking
Transaction Migration Continues
37
31
Percentage of Transactions
21
11
19
Retail Banking
Revenue Generation Through TeleSales
Booked (Millions)
20
Retail Banking
Growing Online Banking Penetration
21
Retail Banking
Key.com Reviews

• Third parties continue to rate Key.com highly

• Key was rated as one of the best bank websites
  that effectively communicates its commitment to
  diversity. (DiversityInc. Dec. 2002)

22
Retail Banking
Relationship Building
Revenue per Sales FTE (Thousands)
23
Retail Banking
Summary

• Keys Retail Bank is positioned for growth
• Retention, expansion acquisition initiatives
  are working.
• Strategic acquisitions and DeNovo expansion will
  supplement organic growth.
• Service quality and convenience, delivered by the
  best people, provide the foundation for our
  distinctiveness in the marketplace.

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PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 FORWARD-LOOKING STATEMENT DISCLOSURE
The presentation and discussion, including
related questions and answers, and presentation
materials, contain forward-looking statements
about issues like anticipated second quarter and
full-year 2003 earnings, anticipated level of net
loan charge-offs and nonperforming assets and
anticipated improvement in profitability and
competitiveness. Forward-looking statements by
their nature are subject to assumptions, risks
and uncertainties. Actual results could differ
materially from those contained in or implied by
such forward-looking statements for a variety of
factors including changes in interest rates
continued weakness in the economy, which could
materially impact credit quality trends and the
ability to generate loans failure of the capital
markets to function consistent with customary
levels delay in or inability to execute
strategic initiatives designed to grow revenues
and/or manage expenses consummation of
significant business combinations or
divestitures new legal obligations or
restrictions or unfavorable resolution of
litigation further disruption in the economy or
the general business climate as a result of
terrorist activities or military actions and
changes in accounting, tax or regulatory
practices or requirements.
25
Retail Banking
Question Answer Session
26
Retail Banking
Patrick J. Swanick President, Retail Banking
Electronic Services KeyBank 127 Public
Square Cleveland, Ohio 44114 USA
Phone [phone] Fax
[phone] eMail patrick_swanick_at_keybank.com