Beth E. Mooney will become chairman and chief executive of KeyCorp next year, succeeding Henry Meyer 3rd, who plans to retire, the company said Thursday.
Mooney, the well-regarded vice chair and head of community banking at the Cleveland company, would be the first woman CEO of a large U.S. banking firm, though women run the stateside retail bank arms of Royal Bank of Scotland and HSBC Holdings PLC.
Mooney — who helped Key end eight consecutive quarters of losses in June — was named president and chief operating officer effective immediately and will assume Meyer's chairman and CEO titles when he steps down in May.
Key has just started recovering from big bets on toxic homebuilder loans ahead of the credit crisis.
The retirement of the 60-year-old Meyer — who became CEO in 2001 — was not unexpected given his age and the strain of the last two years, a period he described in a July interview as "by far the most difficult" of his 38 years in banking.
He is among several aging regional bank executives that industry watchers expect to retire as the industry moves from crisis to recovery mode.
Meyer began his career in the 1970s at Society Corp. and helped oversee its merger with Keycorp in the mid-1990s, establishing one of the country's first super-regional banks. He drew brutal criticism from shareholders as the company lost nearly $3 billion combined in 2008 and 2009. They publicly questioned everything from his competence to the size of his paycheck, which remained high even as Key accepted $2.5 billion of bailout money it has yet to return.
"When we were getting bashed it was like, 'Bankers are bad people' and they are not," Meyer told American Banker in July. "It's nice that it's over."
Mooney, 55, is a natural successor, as her profile has risen in recent years.
She described herself as tough taskmaster in an interview with U.S. Banker in 2009, likening her management style to a "velvet hammer."
She is known to set tight deadlines for tough projects, but she said she tries to keep things light.
"I will say: 'I don't demand much, do I?" she said in the interview. "I just try and soften things up with a humor and acknowledgement that I'm intense — that I want the details."
Mooney — who was viewed as one of at least three potential in-house successor to Meyer — has the kind of diverse resume that bank boards love in a CEO. She has been everything from a bank secretary to commercial banker to a chief financial officer (at the former AmSouth Bancorp.)
She is battled-tested, too: she restructured bad commercial loans for Citibank during the savings-and-loan crisis, and steered Key's retail and commercial banking arm back to profitability a quarter earlier than the parent. The entire company reported profits in the second and third quarters.
Her tenure in the community bank put her ahead of two other potential heirs apparent: Christopher M. Gorman, 49, executive vice president and head of Key's national bank, and Thomas C. Stevens, 60, vice chair and chief administrative officer.
Both have been at Key longer, but Gorman was at a disadvantage because he's only run the national bank — which includes the investment bank and corporate bank — since March. Stevens lacks the intense business line and financial management experience of Mooney — two criteria that are considered necessary for CEOs.
Mooney joined Key in 2006 with the task of overhauling an old, sprawling network of 1,030 branches that stretch from Maine to Alaska. It has been an expensive and slow job that the company never backed away from even as it lost nearly $3 billion in 2008 and 2009 on bad construction loans in California and other states. Key opened and remodeled branches through the recession despite laying off 2,600 hundred people and sharply cutting costs.
She faces several challenges. Chief among them: Key has yet to repay its Troubled Asset Relief Program aid, which could become a competitive disadvantage as the disparity widens between large banks that have and those that haven't. That wedge was magnified this week as regulators said they would stress test all large banks to determine if they can raise their dividends.
Key also needs to fend off increasingly aggressive market share grabs in the Midwest and other regions from Huntington Bancshares Inc. and U.S. Bancorp.