KeyCorp on Thursday slashed its quarterly dividend by two-thirds, to 6.25 cents a share, to further shore up capital in the face of mounting concerns about recession.
The latest cut followed a similarly steep move in June, when the $101 billion-asset Cleveland company lowered its dividend to 18.75 cents from 37.5 cents.
"The modification of our common dividend will help further strengthen Key's capital in light of the current uncertainty facing the U.S. and global economy," Henry L. Meyer III, Key's chairman and chief executive officer, said in a press release after markets closed Thursday. "While difficult, our board and senior management team believe this decision is prudent and proactive in the current environment."
Mr. Meyer said the dividend cut, paired with the $2.5 billion capital raise Key secured this month as a participant in the Treasury's capital purchase program, give Key "the financial flexibility to make loans and expand our business."
Key has a tier 1 capital ratio of about 11%.
