Gary R. Allen, the chairman and chief executive officer of KeyCorp's lead bank subsidiary, said Friday that he would take early retirement and leave the company at yearend.

Bank analysts viewed the move as a sign that the much-touted overhaul of KeyCorp's consumer banking operation has run aground.

"The retail restructuring is not going as swiftly as planned," said Nancy A. Bush of Ryan, Beck & Co. of Livingston, N.J.

Earlier this year KeyCorp announced a major revamping to cut personnel and costs and raise revenue from its 1,006-branch network.

But analysts said the restructuring is probably not generating the returns that the $80 billion-asset company had hoped for. Mr. Allen, they said, may be taking the fall for the program's failure.

KeyCorp is scheduled to report second-quarter profits Thursday. Wall Street consensus estimates call for the company to earn 59 cents per share for the period, compared to 55 cents during the same quarter last year.

KeyCorp told analysts they would receive a full update on the retail initiative after the quarterly report is posted.

Stock in the Cleveland-based company ended Friday's trading at $33.125, up $.625.

"It's come out loud and clear that things need to get moving," said Diana P. Yates, bank analyst with A.G. Edwards in St. Louis.

KeyCorp president and chief operating officer Henry L. Meyer 3d is slated to assume Mr. Allen's responsibilities for retail, small business and commercial banking, at least temporarily.

Ms. Yates said Mr. Meyer is the logical choice to take over those duties, if only for a short time.

"He's more of a cheerleader," she said.

The company refused to say whether it had already begun a search for Mr. Allen's permanent successor.

Neither Mr. Allen nor Mr. Meyer was available for comment.

In a prepared statement Mr. Allen, who is 50, said: "The time is right for me to move on with the next stage of my life."

Last year Mr. Meyer beat out Mr. Allen to become the anointed successor to KeyCorp chairman and chief executive Robert Gillespie, 54.

Mr. Allen is best known at KeyCorp for his focus on operations. He joined the company in 1980 as senior vice president of Key Bank of Western New York, and later served as chief executive of Key Bank of New York when the company combined its three banks there in 1991.

Mr. Allen was named chairman and CEO of Key Bank in 1997, and led the company's charter consolidation nationwide. "This integration paved the way for Key's transformation into a financial services company," Mr. Gillespie said.

Because of lagging returns in KeyCorp's consumer business, the company has been the subject of much takeover speculation in recent months.

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