Bank of Nova Scotia has notified regulators that it intends to raise its stake in KeyCorp to up to 19.99% from its current holding of 14.99%, the bank said in a regulatory filing.
The Canadian institution is planning to acquire additional voting shares of KeyCorp, the Cleveland-based regional lender, and in doing so would also indirectly acquire voting shares of KeyBank National Association, KeyCorp's banking subsidiary.
A KeyCorp spokesperson said the proposed increase in Scotiabank's ownership does not signal any alteration in the nature of the relationship between the two banks. The spokesperson's comment framed the filing as a change in ownership percentage rather than a change in strategic ties.
The timing of Scotiabank's filing comes shortly after KeyCorp announced a $1 billion share-repurchase program. KeyCorp has said that the buyback would raise the ownership stake of existing shareholders by reducing the number of outstanding shares.
Scotiabank and KeyCorp reached their original agreement in August 2024, with the transaction reaching completion in December 2024. As part of that initial deal, Scotiabank invested roughly $2.8 billion to acquire about 14.9% of KeyCorp's common stock.
The earlier investment took place during a period when U.S. regional banks were strengthening capital positions and addressing unrealized losses tied to asset-price mismatches - the same issue the filing notes as having contributed to several regional-bank failures in 2023. The filing does not indicate any additional capital commitments or strategic measures beyond the planned share acquisitions.
Context and implications
The regulatory filing is a formal step that would increase Scotiabank's equity stake while leaving in place KeyCorp's public disclosure that the relationship between the two institutions remains unchanged. The filing specifies the intended increase in ownership percentage but does not detail a timeline for the additional purchases or the mechanism by which those shares will be acquired.
Beyond the ownership change, KeyCorp's $1 billion repurchase program is noted in the filing as a separate action that would concentrate existing shareholders' stakes. The filing does not link the repurchase directly to Scotiabank's planned purchases.
Information included in the filing reiterates facts from the original August 2024 agreement and the December 2024 closing, including Scotiabank's approximately $2.8 billion investment for close to 14.9% common-stock ownership.