KeyCorp reduced its prime lending rate from 7.00% to 6.75%, a change that takes effect on December 11, 2025. The decision, announced on December 10, marks the bank’s first rate adjustment in several months and signals a shift toward more competitive loan pricing in a tightening rate environment.
The 0.25‑percentage‑point cut is expected to lower borrowing costs for both commercial and consumer customers, potentially boosting loan demand. KeyCorp’s net interest margin (NIM) was 2.75% in Q3 2025, a figure that met the bank’s early‑year target. By lowering the prime rate, the bank aims to preserve its NIM while attracting new and existing borrowers, offsetting the spread compression that typically accompanies a rate cut.
KeyCorp’s move places it ahead of peers who may keep rates higher to capture margin gains. In a market where deposit rates are rising, the bank’s decision to reduce the prime rate reflects confidence in its ability to manage NIM and maintain profitability while expanding its loan portfolio. The adjustment also aligns with the bank’s broader strategy of supporting revenue growth targets amid a competitive lending landscape.
The rate cut is part of KeyCorp’s broader effort to balance competitive pricing with capital and earnings objectives. While the lower prime rate may compress margins, the anticipated increase in loan volume is expected to support revenue growth and help the bank meet its long‑term financial goals. The bank’s 200th anniversary in 2025 underscores its long‑standing presence in the market and its continued focus on adapting to evolving economic conditions.
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