Analysts say that KeyCorp's recent restructuring of its consumer banking unit and its bid to find a new head for the division are positive moves.
Earlier this month the Cleveland company reorganized the consumer division, renamed it KeyBank, and said it had begun a search for a new president to head it.
Jack Kopnisky, who had headed Key's consumer bank and worked at the $89.9 billion-asset company for 17 years, had left in July before it announced it would restructure the division.
At the time Mr. Kopnisky said he was leaving to pursue entrepreneurial work, and on Friday the company said in a regulatory filing that Mr. Kopnisky has agreed not to work for another Ohio financial services firm until Nov. 12, 2006. In exchange he will get 15 months of base salary and half of his target incentive compensation. Mr. Kopnisky received a salary of $475,000 in 2004.
Key's chief executive, Henry Meyer, has been trying to remake the company over the last four years. The changes he has made include attracting executive talent from outside Key, changing the commercial business mix, divesting some portfolios, and making acquisitions.
The recent retail reorganization and Friday's announcement of a new senior management team for its global treasury management group show that Mr. Meyer is not quite done, analysts say. And in an interview in June, Mr. Meyer said investors should start seeing results from the makeover by next year.
Analysts now speculate that Mr. Meyer might look externally for the new retail head, as he has done with other senior executive hires.
"One of the things you have seen with Henry that has really changed the franchise is that he has been very good at bringing in talent from the outside," said Peter Winter, an analyst with Bank of Montreal's Harris Nesbitt Corp. "That has been the driving force in changing the perception of the company," he added.
Mr. Meyer, who is searching for Mr. Kopnisky's successor, has created a team of three retail executives who will deliver on his strategy to decentralize the unit geographically.
Under the structure unveiled Aug. 3, consumer banking will be led by three executives. Tim King, who joined Key from Wells Fargo & Co. last year, is head of the retail group and is responsible for strategy, product development, mergers and acquisitions, and distribution. George Emmons, as community bank president, will be responsible for sales; and Robert "Yank" Heisler heads the brokerage unit, McDonald Financial Group. All three will report to the new president.
The retail banking operation has moved from a centralized business model to one with 13 independently operating centers spanning all of its markets. The centers will also handle local middle-market and small-business banking. In the second quarter, the consumer unit reported a 20% increase in net income over last year, to $125 million. However, its contribution to the company's total net income was flat at 43%.
Jason Goldberg, a Lehman Brothers analyst, said the retail restructuring is another in a series of positive steps at Key. Since becoming CEO in 2001, Mr. Meyer has cleaned up the asset quality and "right-sized" the business mix, Mr. Goldberg said.
