KeyCorp (KEY) 8-K Keycorp Reports Third Quarter 2003 Earnings

Exhibit 99.1

Media Contact:	John Fuller	Analyst Contact:	Vernon L. Patterson
	216.689.8140		216.689.0520
Key Media		Investor Relations
Newsroom:	www.Key.com/newsroom	Information:	www.Key.com/ir

FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER 2003 EARNINGS

• EPS of $0.53

• Continued improvement in asset quality

• Higher noninterest income

• Board authorizes repurchase of 25 million shares

CLEVELAND, October 16, 2003 — KeyCorp (NYSE: KEY) today announced third quarter net income of $227 million, or $0.53 per diluted common share. These results compare with net income of $225 million, or $0.53 per share, for the second quarter of 2003, and $245 million, or $0.57 per share, for the third quarter of 2002.

     “Key’s third quarter earnings reflect positive results in important areas, despite the weak economic environment,” said Chairman and Chief Executive Officer Henry L. Meyer III. “These results include higher noninterest income and continued growth in core deposits.

     “We are also very encouraged by the continued improvement in Key’s asset quality, as nonperforming loans fell for the fourth consecutive quarter and net loan charge-offs declined to their lowest level since the first quarter of 2001.

     “However, the third quarter also presented a difficult environment for net interest income,” added Meyer. “Historically low interest rates led to record levels of prepayments and narrower deposit spreads. In addition, despite continued growth in our commercial leasing and home equity businesses, the economic environment was not favorable for loan growth in general. The level of Key’s average earning assets was essentially unchanged from the prior quarter.”

     For the fourth quarter, Key expects earnings to be in the range of $0.52 to $0.55 per share.

SUMMARY OF CONSOLIDATED RESULTS

     Taxable-equivalent net interest income was $690 million for the third quarter of 2003, compared with $710 million in the second quarter. A 12 basis point reduction in Key’s net interest margin drove the decrease, as the level of Key’s average earning assets was essentially unchanged. Continued growth in home equity loans was offset by declines in the levels of both commercial loans and securities. Compared with the third quarter of 2002, taxable-equivalent net interest income decreased by $32 million as the negative effect of a lower net interest margin more than offset the effect of a 2% increase in average earning assets.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
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     The decline in the net interest margin relative to both the prior and year-ago quarters reflects a number of factors, including the effects of a soft economy, significant prepayments of higher rate consumer loans and mortgage backed securities which continued late into the third quarter, and narrower deposit spreads resulting from declining interest rates. Also contributing to the declines was the significant growth in Key’s core deposits. Over the past twelve months, core deposit growth has exceeded net loan growth. The excess funds have been either invested in securities or used to reduce wholesale funding in light of the weak demand for commercial loans. Although these actions improved Key’s liquidity, they have resulted in downward pressure on net interest income.

     Key’s noninterest income was $463 million for the third quarter of 2003, up from $434 million for the second quarter. A $25 million increase in net gains from loan securitizations and sales, including a $10 million gain from the annual securitization and sale of education loans in the third quarter of 2003, drove the increase. In addition, stronger financial markets contributed to an $8 million increase in income from trust and investment services, the largest source of Key’s noninterest income. Compared with the year-ago quarter, noninterest income grew by $31 million, reflecting a $16 million increase in income from principal investing activities and an $11 million decrease in losses incurred on the residual values of leased vehicles. These improvements from third quarter 2002 results were offset in part by lower income from trust and investment services and service charges on deposit accounts. The major components of Key’s trust and investment services income and investment banking and capital markets income are shown in the following tables.

Trust and Investment Services Income

		Three months ended						Nine months ended
in millions		9-30-03		6-30-03		9-30-02		9-30-03		9-30-02
Personal asset management and custody fees		$	39	$	36	$	38	$	111	$	120
Institutional asset management and custody fees			10		9		20		29		60
Bond services			10		9		9		29		29
Brokerage commission income			47		48		48		141		149
All other fees			33		29		36		92		109
	Total trust and investment services income	$	139	$	131	$	151	$	402	$	467

Investment Banking and Capital Markets Income

		Three months ended						Nine months ended
in millions		9-30-03		6-30-03		9-30-02		9-30-03		9-30-02
Dealer trading and derivatives income		$	3	$	3	$	3	$	15	$	27
Investment banking income			23		22		23		67		78
Net gains (losses) from principal investing			16		20		—		32		(1	)
Foreign exchange income			10		8		8		25		26
	Total investment banking and capital markets income	$	52	$	53	$	34	$	139	$	130

     Noninterest expense of $699 million for the third quarter of 2003 was up from $688 million in the prior quarter due primarily to higher incentive compensation accruals and the expensing of stock options granted in July 2003. Effective January 1, 2003, Key began recording the cost associated with stock options over their respective vesting periods. Compared with the third quarter of 2002, noninterest expense grew by $40 million, or 6%. The largest increases occurred in the cost of employee benefits, incentive compensation accruals, professional fees incurred to enhance Key’s sales management systems and stock options expense. The major components of personnel expense, the largest category of Key’s noninterest expense, are shown in the following table.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
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Personnel Expense

		Three months ended						Nine months ended
in millions		9-30-03		6-30-03		9-30-02		9-30-03		9-30-02
Salaries		$	215	$	218	$	218	$	656	$	647
Employee benefits			63		64		53		198		171
Incentive compensation			94		86		85		245		259
Stock-based compensation			8		3		2		15		5
	Total personnel expense	$	380	$	371	$	358	$	1,114	$	1,082

CHANGE IN CONSOLIDATION PRACTICE

     In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” which significantly changes how Key and other companies determine whether they must consolidate certain other entities. Interpretation No. 46 was effective immediately for entities created after January 31, 2003, and must be adopted for previously existing entities no later than December 31, 2003. Key adopted Interpretation No. 46 for previously existing entities in the third quarter of 2003.

     Under Interpretation No. 46, entities are classified as either voting rights entities or variable interest entities. A voting rights entity is evaluated for consolidation under previously existing accounting standards, which focus on the equity owner with voting control, while a variable interest entity must now be consolidated by its primary beneficiary (i.e., the party that holds variable interests that expose it to a majority of the entity’s expected losses and/or residual returns).

     The new guidance primarily affects Key’s balance sheet, since consolidating previously unconsolidated variable interest entities increases, and in some cases changes the classification of, assets and liabilities. As of September 30, 2003, the consolidation and deconsolidation of variable interest entities in accordance with the requirements of Interpretation No. 46 resulted in a net increase to Key’s assets of almost $850 million, with no material effect on Key’s results of operations.

ASSET QUALITY

     Key’s provision for loan losses was $123 million for the third quarter of 2003, compared with $125 million for the second quarter of 2003 and $135 million for the year-ago quarter.

     During the third quarter of 2003, Key’s nonperforming loans decreased by $42 million to $795 million, primarily due to reductions in the health care, middle market and structured finance portfolios. The primary indicators of Key’s asset quality over the past five quarters are summarized in the following table.

Asset Quality Indicators

dollars in millions	3Q03			2Q03			1Q03			4Q02			3Q02
Net loan charge-offs	$	123		$	141		$	161		$	186		$	185
Net loan charge-offs to average loans		.77	%		.90	%		1.04	%		1.18	%		1.16	%
Allowance for loan losses	$	1,405		$	1,405		$	1,421		$	1,452		$	1,489
Allowance for loan losses to period-end loans		2.24	%		2.22	%		2.27	%		2.32	%		2.37	%
Allowance for loan losses to nonperforming loans		176.73			167.86			157.19			153.98			150.86
Nonperforming loans at period end	$	795		$	837		$	904		$	943		$	987
Nonperforming assets at period end		862			897			968			993			1,017
Nonperforming loans to period-end loans		1.27	%		1.32	%		1.44	%		1.51	%		1.57	%
Nonperforming assets to period-end loans plus OREO and other nonperforming assets		1.37			1.42			1.54			1.59			1.61

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 4

CAPITAL

     Key’s capital ratios continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2003. In addition, Key’s tangible equity to tangible assets ratio was 6.94% at quarter end, compared with 6.90% at June 30, 2003, and 6.71% at September 30, 2002.

     During the third quarter, Key repurchased 2.5 million of its common shares under a September 2002 authorization that allowed for the repurchase of up to 25 million shares. During September 2003, the Board of Directors authorized the repurchase of 25 million common shares, which amount includes the 6.3 million shares remaining from the preexisting repurchase authority. Share repurchases and other activities that caused the change in Key’s outstanding common shares over the past five quarters are summarized in the table below.

Summary of Changes in Common Shares Outstanding

in thousands	3Q03			2Q03			1Q03			4Q02			3Q02
Shares outstanding at beginning of period		421,074			422,783			423,944			424,864			426,351
Issuance of shares under employee benefit and dividend reinvestment plans		692			1,291			839			300			293
Repurchase of common shares		(2,500	)		(3,000	)		(2,000	)		(1,220	)		(1,780	)
Shares outstanding at end of period		419,266			421,074			422,783			423,944			424,864

LINE OF BUSINESS RESULTS

     The table below summarizes the contribution made by each major business group to Key’s taxable-equivalent revenue and net income for the periods presented. The specific lines of business that comprise each of the major business groups are described under the heading “Line of Business Descriptions.” For more detailed financial information pertaining to each business group and its respective lines of business, see the last three pages of this release.

Major Business Groups

											Percent change 3Q03 vs.
dollars in millions		3Q03			2Q03			3Q02			2Q03			3Q02
Revenue (taxable equivalent)
Consumer Banking		$	616		$	581		$	577			6.0	%		6.8	%
Corporate and Investment Banking			383			385			379			(.5	)		1.1
Investment Management Services			208			188			206			10.6			1.0
Other Segments			(25	)		24			12			N/M			N/M
	Total segments		1,182			1,178			1,174			.3			.7
Reconciling Items			(29	)		(34	)		(20	)		14.7			(45.0	)
	Total	$	1,153		$	1,144		$	1,154			.8			(.1	)
Net income (loss)
Consumer Banking		$	120		$	102		$	107			17.6	%		12.1	%
Corporate and Investment Banking			96			92			91			4.3			5.5
Investment Management Services			26			16			26			62.5			—
Other Segments			(10	)		19			14			N/M			N/M
	Total segments		232			229			238			1.3			(2.5	)
Reconciling Items			(5	)		(4	)		7			(25.0	)		N/M
	Total	$	227		$	225		$	245			.9			(7.3	)

N/M = Not Meaningful

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 5

Consumer Banking

										Percent change 3Q03 vs.
dollars in millions		3Q03			2Q03		3Q02			2Q03			3Q02
Summary of operations
	Net interest income (TE)	$	475		$	459	$	441			3.5	%		7.7	%
	Noninterest income		141			122		136			15.6			3.7
	Total revenue (TE)		616			581		577			6.0			6.8
	Provision for loan losses		70			65		69			7.7			1.4
	Noninterest expense		355			353		337			.6			5.3
	Income before income taxes (TE)		191			163		171			17.2			11.7
	Allocated income taxes and TE adjustments		71			61		64			16.4			10.9
	Net income	$	120		$	102	$	107			17.6			12.1
	Percent of consolidated net income		53	%		45		44	%		N/A			N/A
Average balances
	Loans	$	29,100		$	28,874	$	28,243			.8	%		3.0	%
	Total assets		31,516			31,280		30,593			.8			3.0
	Deposits		34,999			34,780		33,580			.6			4.2

TE = Taxable Equivalent, N/A = Not Applicable

Additional Consumer Banking Data

												Percent change 3Q03 vs.
dollars in billions			3Q03			2Q03			3Q02			2Q03			3Q02
Average deposits outstanding
Noninterest-bearing				$ 5,704			$ 5,423			$ 5,184			5.2	%		10.0	%
Money market deposit accounts and other savings				15,576			15,176			12,819			2.6			21.5
Time				13,719			14,181			15,577			(3.3	)		(11.9	)
		Total deposits		$34,999			$34,780			$33,580			.6			4.2
Home equity loans
Retail Banking and Small Business:
	Average balance			$ 8.3			$ 8.0			$ 7.3
	Average loan-to-value ratio			72	%		72	%		72	%
	Percent first lien positions			58			56			49
National Home Equity:
	Average balance			$ 5.2			$ 5.1			$ 5.0
	Average loan-to-value ratio			74	%		75	%		77	%
	Percent first lien positions			82			81			77
Other data
On-line clients / household penetration				722,172/37	%		665,781/35	%		534,385/30	%
KeyCenters				900			903			903
Automated teller machines				2,158			2,159			2,249

     Net income for Key Consumer Banking was $120 million for the third quarter of 2003, representing a $13 million increase from the year-ago quarter. The increase was due primarily to growth in both taxable-equivalent net interest income and noninterest income, offset in part by a higher level of noninterest expense.

     Taxable-equivalent net interest income grew by $34 million, or 8%, from the third quarter of 2002, due largely to an improved interest rate spread on earning assets, a 3% increase in average loans outstanding, primarily in the home equity and commercial portfolios, and a higher level of average core deposits. The positive effect of these factors was offset in part by the adverse effect of a less favorable interest rate spread on deposits.

     Noninterest income increased by $5 million, or 4%, due to a reduction in losses incurred on the residual values of leased vehicles and an increase in net gains from the annual securitization and sale of education loans, both in the Indirect Lending unit. These improvements were substantially offset by a reduction in service charges on deposit accounts generated by the Retail Banking line of business. The decrease in deposit service charges reflects lower overdraft fees, as well as the introduction of free checking products during the second half of 2002.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 6

     Noninterest expense rose by $18 million, or 5%, from the third quarter of 2002. Most of the increase was attributable to personnel expense, costs associated with other real estate owned and various indirect charges.

Corporate and Investment Banking

											Percent change 3Q03 vs.
dollars in millions		3Q03			2Q03			3Q02			2Q03			3Q02
Summary of operations
	Net interest income (TE)	$	258		$	261		$	268			(1.1	)%		(3.7	)%
	Noninterest income		125			124			111			.8			12.6
	Total revenue (TE)		383			385			379			(.5	)		1.1
	Provision for loan losses		48			56			64			(14.3	)		(25.0	)
	Noninterest expense		181			182			169			(.5	)		7.1
	Income before income taxes (TE)		154			147			146			4.8			5.5
	Allocated income taxes and TE adjustments		58			55			55			5.5			5.5
	Net income	$	96		$	92		$	91			4.3			5.5
	Percent of consolidated net income		42	%		41	%		37	%		N/A			N/A
Average balances
	Loans	$	27,784		$	28,126		$	29,123			(1.2	)%		(4.6	)%
	Total assets		32,469			32,508			32,749			(.1	)		(.9	)
	Deposits		4,621			4,145			3,384			11.5			36.6

TE = Taxable Equivalent, N/A = Not Applicable

     Net income for Corporate and Investment Banking was $96 million for the third quarter of 2003, up from $91 million for the same period last year. Significantly higher noninterest income and a substantial reduction in the provision for loan losses were partially offset by a decrease in taxable-equivalent net interest income and higher noninterest expense.

     Taxable-equivalent net interest income decreased by $10 million, or 4%, from the third quarter of 2002 due primarily to less favorable interest rate spreads on deposits and other funding sources. Declines in average loans outstanding and yield-related loan fees also contributed to the decrease. The adverse effect of these factors was partially offset by the positive effects of core deposit growth and a more favorable interest rate spread on earning assets.

     Noninterest income increased by $14 million, or 13%, due largely to an increase in non-yield-related loan fees and higher net gains from loan sales in the KeyBank Real Estate Capital line of business.

     Noninterest expense rose by $12 million, or 7%, reflecting increases in personnel expense, professional fees and various indirect charges.

     The provision for loan losses decreased by $16 million, or 25%, as a result of improved asset quality in both the Corporate Banking and Key Equipment Finance lines.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
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Investment Management Services

											Percent change 3Q03 vs.
dollars in millions		3Q03			2Q03			3Q02			2Q03			3Q02
Summary of operations
	Net interest income (TE)	$	65		$	61		$	56			6.6	%		16.1	%
	Noninterest income		143			127			150			12.6			(4.7	)
	Total revenue (TE)		208			188			206			10.6			1.0
	Provision for loan losses		5			4			2			25.0			150.0
	Noninterest expense		161			157			162			2.5			(.6	)
	Income before income taxes (TE)		42			27			42			55.6			—
	Allocated income taxes and TE adjustments		16			11			16			45.5			—
	Net income	$	26		$	16		$	26			62.5			—
	Percent of consolidated net income		11	%		7	%		11	%		N/A			N/A
Average balances
	Loans	$	5,100		$	5,031		$	4,826			1.4	%		5.7	%
	Total assets		6,311			6,024			5,782			4.8			9.1
	Deposits		6,382			5,939			3,695			7.5			72.7

TE = Taxable Equivalent, N/A = Not Applicable

Additional Investment Management Services Data

dollars in billions	3Q03		2Q03		3Q02
Assets under management	$	65.0	$	63.3	$	62.4
Nonmanaged and brokerage assets		63.4		61.5		67.2

     Net income for Investment Management Services was $26 million for the third quarter of 2003, unchanged from the third quarter of last year. Growth in taxable-equivalent net interest income was offset by a decrease in noninterest income and a higher provision for loan losses. Noninterest expense was essentially unchanged.

     Taxable-equivalent net interest income increased by $9 million, or 16%, from the third quarter of 2002. The increase was due primarily to strong growth in both average loans and core deposits. The positive effect of this growth was offset in part by the adverse effect of a less favorable interest rate spread on deposits.

     Noninterest income decreased by $7 million, or 5%, due to a $9 million decrease in trust and investment services income. The decline was due largely to the June 2002 sale of the 401(k) plan recordkeeping business. The reduction in trust and investment services income was offset in part by an increase in investment banking income.

     The provision for loan losses rose by $3 million, reflecting a higher level of net charge-offs in the McDonald Financial Group.

Other Segments

     Other segments consist primarily of Treasury, Principal Investing and the net effect of funds transfer pricing. These segments generated a net loss of $10 million for the third quarter of 2003, compared with net income of $14 million for the same period last year. The change in results from the third quarter of 2002 was due primarily to the net effect of funds transfer pricing and includes the effect of loan and security sales and prepayments on the funding center.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
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Line of Business Descriptions

Consumer Banking

     Retail Bankingprovides individuals with branch-based deposit and investment products, personal finance services and loans, including residential mortgages, home equity and various types of installment loans.

     Small Businessprovides businesses that have annual sales revenues of $10 million or less with deposit, investment and credit products, and business advisory services.

     Consumer Financeconsists of two primary business units: Indirect Lending and National Home Equity.

     Indirect Lending offers automobile and marine loans to consumers through dealers and finances inventory for automobile and marine dealers. This business unit also provides education loans, insurance and interest-free payment plans for students and their parents.

     National Home Equity provides both prime and nonprime mortgage and home equity loan products to individuals. These products originate outside of Key’s retail branch system. This business unit also works with mortgage brokers and home improvement contractors to provide home equity and home improvement solutions.

Corporate and Investment Banking

     Corporate Bankingprovides a full array of products and services to large corporations, middle-market companies, financial institutions and government organizations. These products and services include: financing, treasury management, investment banking, derivatives and foreign exchange, debt and equity trading, and syndicated finance.

     KeyBank Real Estate Capitalprovides construction and interim lending, permanent debt placements and servicing, and equity and investment banking services to developers, brokers and owner-investors. This line of business deals exclusively with nonowner-occupied properties (i.e., generally properties for which the owner occupies less than 60% of the premises).

     Key Equipment Financemeets the equipment leasing needs of companies worldwide and provides equipment manufacturers, distributors and resellers with financing options for their clients. Lease financing receivables and related revenues are assigned to other lines of business (primarily Corporate Banking) if those businesses are principally responsible for maintaining the relationship with the client.

Investment Management Services

     Investment Management Servicesconsists of two primary business units: Victory Capital Management and McDonald Financial Group.

     Victory Capital Management manages or gives advice regarding investment portfolios for a national client base, including corporations, labor unions, not-for-profit organizations, governments and individuals. These portfolios may be managed in separate accounts, common funds or the Victory family of mutual funds.

     McDonald Financial Group offers financial, estate and retirement planning and asset management services to assist high-net-worth clients with their banking, brokerage, trust, portfolio management, insurance, charitable giving and related needs.

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 9

     Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $84 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company’s businesses deliver their products and services through 900 KeyCenters and offices; a network of 2,158 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com,®that provides account access and financial products 24 hours a day.

Notes to Editors:

A live Internet broadcast of KeyCorp’s conference call to discuss quarterly earnings and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section atwww.Key.com/irat 9:00 a.m. ET, on Thursday, October 16, 2003. A tape of the call will be available through October 23.

For up-to-date company information, media contacts and facts and figures about Key’s lines of business visit our Media Newsroom atwww.Key.com/newsroom.

This news release contains forward-looking statements about issues like anticipated earnings outlook, asset quality trends and anticipated improvement in profitability and competitiveness. Forward-looking statements by their nature are subject to assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such forward-looking statements for a variety of factors including: changes in interest rates; continued weakness in the economy which could materially impact credit quality trends and the ability to generate loans; failure of the capital markets to function consistent with customary levels; delay in or inability to execute strategic initiatives designed to grow revenues and/or manage expenses; consummation of significant business combinations or divestitures; new legal obligations or restrictions or unfavorable resolution of litigation; further disruption in the economy and the general business climate as a result of terrorist activities or military actions; and changes in accounting, tax or regulatory practices or requirements.

###

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 10

Financial Highlights
(dollars in millions, except per share amounts)

			Three months ended
			9-30-03			6-30-03			9-30-02
Summary of operations
	Net interest income (TE)		$	690		$	710		$	722
	Noninterest income			463			434			432
		Total revenue (TE)		1,153			1,144			1,154
	Provision for loan losses			123			125			135
	Noninterest expense			699			688			659
	Net income			227			225			245
Per common share
	Net income		$	.54		$	.53		$	.57
	Net income — assuming dilution			.53			.53			.57
	Cash dividends paid			.305			.305			.30
	Book value at period end			16.64			16.60			15.66
	Market price at period end			25.57			25.27			24.97
Performance ratios
	Return on average total assets			1.06	%		1.07	%		1.19	%
	Return on average equity			13.06			12.98			14.74
	Net interest margin (TE)			3.73			3.85			3.99
Capital ratios at period end
	Equity to assets			8.26	%		8.18	%		7.97	%
	Tangible equity to tangible assets			6.94			6.90			6.71
	Tier 1 risk-based capital a			8.12			8.02			8.34
	Total risk-based capital a			12.13			12.26			12.69
	Leverage a			8.35			8.12			8.15
Asset quality
	Net loan charge-offs		$	123		$	141		$	185
	Net loan charge-offs to average loans			.77	%		.90	%		1.16	%
	Allowance for loan losses		$	1,405		$	1,405		$	1,489
	Allowance for loan losses to period-end loans			2.24	%		2.22	%		2.37	%
	Allowance for loan losses to nonperforming loans			176.73			167.86			150.86
	Nonperforming loans at period end		$	795		$	837		$	987
	Nonperforming assets at period end			862			897			1,017
	Nonperforming loans to period-end loans			1.27	%		1.32	%		1.57	%
	Nonperforming assets to period-end loans plus OREO and other nonperforming assets			1.37			1.42			1.61
Other data
	Average full-time equivalent employees			20,059			19,999			20,802
	KeyCenters			900			903			903
Taxable-equivalent adjustment			$	13		$	14		$	22

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 11

Financial Highlights (continued)
(dollars in millions, except per share amounts)

			Nine months ended
			9-30-03			9-30-02
Summary of operations
	Net interest income (TE)		$	2,103		$	2,145
	Noninterest income			1,294			1,323
		Total revenue (TE)		3,397			3,468
	Provision for loan losses			378			406
	Noninterest expense			2,044			1,985
	Net income			669			731
Per common share
	Net income		$	1.58		$	1.72
	Net income — assuming dilution			1.57			1.69
	Cash dividends paid			.915			.90
Performance ratios
	Return on average total assets			1.06	%		1.20	%
	Return on average equity			12.98			15.13
	Net interest margin (TE)			3.81			3.97
Asset quality
	Net loan charge-offs		$	425		$	594
	Net loan charge-offs to average loans			.90	%		1.25	%
Other data
	Average full-time equivalent employees			20,174			20,927
Taxable-equivalent adjustment			$	49		$	108

^(a) 9-30-03 ratio is estimated.

TE = Taxable Equivalent

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 12

Consolidated Balance Sheets
(dollars in millions)

			9-30-03			6-30-03			9-30-02
Assets
	Loans		$	62,723		$	63,214		$	62,951
	Investment securities			106			99			148
	Securities available for sale			7,550			7,533			7,409
	Short-term investments			1,776			1,867			1,190
	Other investments			1,103			1,003			848
		Total earning assets		73,258			73,716			72,546
	Allowance for loan losses			(1,405	)		(1,405	)		(1,489	)
	Cash and due from banks			2,398			3,249			3,039
	Premises and equipment			614			606			651
	Goodwill			1,154			1,142			1,105
	Other intangible assets			41			31			23
	Corporate-owned life insurance			2,483			2,470			2,384
	Accrued income and other assets			5,917			5,670			5,257
		Total assets	$	84,460		$	85,479		$	83,516
Liabilities
	Deposits in domestic offices:
		Noninterest-bearing	$	10,947		$	11,375		$	10,063
		Interest-bearing		36,389			36,174			33,301
	Deposits in foreign office — interest-bearing			1,403			2,320			1,246
		Total deposits		48,739			49,869			44,610
	Federal funds purchased and securities sold under repurchase agreements			4,804			3,766			6,350
	Bank notes and other short-term borrowings			2,707			3,403			2,908
	Accrued expense and other liabilities			5,891			5,760			5,438
	Long-term debt			15,342			14,434			16,276
	Capital securities of subsidiary trusts			—			1,258			1,282
		Total liabilities		77,483			78,490			76,864
Shareholders’ equity				6,977			6,989			6,652
Total liabilities and shareholders’ equity			$	84,460		$	85,479		$	83,516
Common shares outstanding (000)				419,266			421,074			424,864

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 13

Consolidated Statements of Income
(dollars in millions, except per share amounts)

			Three months ended						Nine months ended
			9-30-03		6-30-03		9-30-02		9-30-03		9-30-02
Interest income			$	971	$	1,022	$	1,095	$	3,014	$	3,289
Interest expense				294		326		395		960		1,252
Net interest income				677		696		700		2,054		2,037
Provision for loan losses				123		125		135		378		406
				554		571		565		1,676		1,631
Noninterest income
	Trust and investment services income			139		131		151		402		467
	Service charges on deposit accounts			93		91		102		276		306
	Investment banking and capital markets income			52		53		34		139		130
	Letter of credit and loan fees			42		40		36		113		93
	Corporate-owned life insurance income			27		27		25		81		77
	Electronic banking fees			20		22		21		61		59
	Net securities gains			2		3		—		9		1
	Other income			88		67		63		213		190
		Total noninterest income		463		434		432		1,294		1,323
Noninterest expense
	Personnel			380		371		358		1,114		1,082
	Net occupancy			56		56		57		171		170
	Computer processing			43		44		45		131		147
	Equipment			35		34		33		101		103
	Marketing			30		33		33		88		89
	Professional fees			30		32		21		87		63
	Other expense			125		118		112		352		331
		Total noninterest expense		699		688		659		2,044		1,985
Income before income taxes				318		317		338		926		969
	Income taxes			91		92		93		257		238
Net income			$	227	$	225	$	245	$	669	$	731
Net income per common share			$	.54	$	.53	$	.57	$	1.58	$	1.72
Net income per common share -— assuming dilution				.53		.53		.57		1.57		1.69
Weighted average common shares outstanding (000)				421,971		423,882		426,274		423,697		425,746
Weighted average common shares and potential common shares outstanding (000)				425,669		427,170		431,326		426,968		431,098

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 14

Consolidated Average Balance Sheets, Net Interest Income and Yields/Rates
(dollars in millions)

			Third Quarter 2003								Second Quarter 2003								Third Quarter 2002
			Average								Average								Average
			Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets
	Loans: a,b
	Commercial, financial and agricultural		$	17,188		$	202		4.65	%	$	17,391		$	218		5.01	%	$	17,485		$	225		5.11	%
	Real estate — commercial mortgage			5,859			77		5.21			5,932			80		5.38			6,207			93		5.92
	Real estate — construction			5,196			66		5.05			5,331			68		5.14			5,822			79		5.37
	Commercial lease financing			7,995			118		5.91			7,883			119		6.05			7,215			121		6.72
		Total commercial loans		36,238			463		5.07			36,537			485		5.32			36,729			518		5.60
	Real estate — residential			1,707			28		6.43			1,803			30		6.54			2,089			37		7.00
	Home equity			14,862			218		5.80			14,433			219		6.09			13,505			222		6.52
	Consumer — direct			2,162			39		7.19			2,135			40		7.44			2,172			46		8.32
	Consumer — indirect lease financing			460			11		9.60			601			14		9.40			1,264			28		8.98
	Consumer — indirect other			5,123			105		8.23			5,002			105		8.43			5,143			117		9.13
		Total consumer loans		24,314			401		6.55			23,974			408		6.82			24,173			450		7.41
	Loans held for sale			2,526			29		4.53			2,518			29		4.70			2,584			35		5.48
		Total loans		63,078			893		5.62			63,029			922		5.86			63,486			1,003		6.29
	Taxable investment securities			14			—		4.46			5			—		5.44			1			—		8.45
	Tax-exempt investment securities a			91			2		9.76			110			3		9.46			166			4		8.76
		Total investment securities		105			2		9.07			115			3		9.27			167			4		8.75
	Securities available for sale a, c			7,877			77		3.91			8,321			96		4.68			6,424			98		6.11
	Short-term investments			1,531			6		1.70			1,484			8		2.12			1,151			6		2.28
	Other investments c			1,032			6		2.68			985			7		2.47			855			6		2.46
		Total earning assets		73,623			984		5.32			73,934			1,036		5.61			72,083			1,117		6.17
	Allowance for loan losses			(1,396	)							(1,409	)							(1,509	)
	Accrued income and other assets			12,495								12,187								11,361
		Total assets	$	84,722							$	84,712							$	81,935
Liabilities
	NOW and money market deposit accounts		$	18,381			35		.75		$	17,740			41		.93		$	13,293			30		.91
	Savings deposits			2,092			2		.48			2,084			3		.54			2,002			3		.67
	Certificates of deposit ($100,000 or more) d			4,898			46		3.78			4,743			47		3.98			4,886			54		4.45
	Other time deposits			11,073			81		2.89			11,434			84		2.96			12,713			115		3.57
	Deposits in foreign office			1,627			4		1.04			2,445			8		1.25			2,593			12		1.76
		Total interest-bearing deposits		38,071			168		1.76			38,446			183		1.91			35,487			214		2.40
	Federal funds purchased and securities sold under repurchase agreements			5,133			12		.93			5,075			15		1.19			5,483			23		1.69
	Bank notes and other short-term borrowings d			2,559			13		2.05			2,351			15		2.58			2,581			18		2.73
	Long-term debt, including capital securities d			15,421			101		2.68			16,309			113		2.90			17,455			140		3.25
		Total interest-bearing liabilities		61,184			294		1.93			62,181			326		2.13			61,006			395		2.59
	Noninterest-bearing deposits			10,628								10,053								9,177
	Accrued expense and other liabilities			6,016								5,526								5,159
	Total liabilities			77,828								77,760								75,342
Shareholders’ equity				6,894								6,952								6,593
		Total liabilities and shareholders’ equity	$	84,722							$	84,712							$	81,935
Interest rate spread (TE)									3.39	%							3.48	%							3.58	%
Net interest income (TE) and net interest margin (TE)							690		3.73	%					710		3.85	%					722		3.99	%
TE adjustment a							13								14								22
	Net interest income, GAAP basis					$	677							$	696							$	700
Capital securities				—			—				$	1,266		$	18				$	1,249		$	19

^(a) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%.

^(b) For purposes of these computations, nonaccrual loans are included in average loan balances.

^(c) Yield is calculated on the basis of amortized cost.

^(d) Rate calculation excludes basis adjustments related to fair value hedges.

TE = Taxable Equivalent

GAAP = Generally Accepted Accounting Principles

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 15

Line of Business Results
(dollars in millions)

Consumer Banking

																	Percent change 3Q03 vs.
		3Q03			2Q03			1Q03			4Q02			3Q02			2Q03			3Q02
Summary of operations
	Total revenue (TE)	$	616		$	581		$	560		$	575		$	577			6.0	%		6.8	%
	Provision for loan losses		70			65			78			77			69			7.7			1.4
	Noninterest expense		355			353			330			336			337			.6			5.3
	Net income		120			102			94			101			107			17.6			12.1
	Average loans		29,100			28,874			28,476			27,864			28,243			.8			3.0
	Average deposits		34,999			34,780			34,357			33,910			33,580			.6			4.2
	Net loan charge-offs		70			65			78			77			70			7.7			—
	Return on average allocated equity		21.08	%		18.36	%		17.38	%		18.98	%		20.22	%		N/A			N/A
	Average full-time equivalent employees		8,508			8,449			8,522			8,327			8,439			.7			.8
Supplementary information (lines of business)
Retail Banking
	Total revenue (TE)	$	342		$	334		$	321		$	334		$	337			2.4	%		1.5	%
	Provision for loan losses		14			15			16			17			16			(6.7	)		(12.5	)
	Noninterest expense		212			212			200			204			207			—			2.4
	Net income		73			67			65			70			71			9.0			2.8
	Average loans		10,194			9,839			9,570			9,377			9,122			3.6			11.8
	Average deposits		30,051			30,181			29,929			29,548			29,448			(.4	)		2.0
	Net loan charge-offs		14			15			16			17			17			(6.7	)		(17.6	)
	Return on average allocated equity		45.25	%		42.32	%		41.71	%		47.07	%		48.48	%		N/A			N/A
	Average full-time equivalent employees		6,203			6,133			6,190			6,025			6,154			1.1			.8
Small Business
	Total revenue (TE)	$	102		$	98		$	96		$	97		$	98			4.1	%		4.1	%
	Provision for loan losses		17			18			17			15			16			(5.6	)		6.3
	Noninterest expense		49			49			45			45			46			—			6.5
	Net income		23			20			21			23			23			15.0			—
	Average loans		4,406			4,438			4,417			4,297			4,343			(.7	)		1.5
	Average deposits		4,564			4,264			4,076			4,006			3,799			7.0			20.1
	Net loan charge-offs		17			18			17			15			16			(5.6	)		6.3
	Return on average allocated equity		21.94	%		19.71	%		21.45	%		23.76	%		24.08	%		N/A			N/A
	Average full-time equivalent employees		404			404			381			331			327			—			23.5
Consumer Finance
	Total revenue (TE)	$	172		$	149		$	143		$	144		$	142			15.4	%		21.1	%
	Provision for loan losses		39			32			45			45			37			21.9			5.4
	Noninterest expense		94			92			85			87			84			2.2			11.9
	Net income		24			15			8			8			13			60.0			84.6
	Average loans		14,500			14,597			14,489			14,190			14,778			(.7	)		(1.9	)
	Average deposits		384			335			352			356			333			14.6			15.3
	Net loan charge-offs		39			32			45			45			37			21.9			5.4
	Return on average allocated equity		7.91	%		5.07	%		2.79	%		2.79	%		4.53	%		N/A			N/A
	Average full-time equivalent employees		1,901			1,912			1,951			1,971			1,958			(.6	)		(2.9	)

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 16

Line of Business Results (continued)
(dollars in millions)

Corporate and Investment Banking

																	Percent change 3Q03 vs.
		3Q03			2Q03			1Q03			4Q02			3Q02			2Q03			3Q02
Summary of operations
	Total revenue (TE)	$	383		$	385		$	368		$	406		$	379			(.5)	%		1.1	%
	Provision for loan losses		48			56			50			67			64			(14.3	)		(25.0	)
	Noninterest expense		181			182			167			181			169			(.5	)		7.1
	Net income		96			92			95			99			91			4.3			5.5
	Average loans		27,784			28,126			28,344			28,665			29,123			(1.2	)		(4.6	)
	Average deposits		4,621			4,145			4,043			3,926			3,384			11.5			36.6
	Net loan charge-offs		48			73			79			106			113			(34.2	)		(57.5	)
	Return on average allocated equity		11.36	%		10.96	%		11.52	%		11.92	%		11.08	%		N/A			N/A
	Average full-time equivalent employees		2,475			2,425			2,453			2,478			2,461			2.1			.6
Supplementary information (lines of business)
Corporate Banking
	Total revenue (TE)	$	224		$	221		$	220		$	237		$	230			1.4	%		(2.6	)%
	Provision for loan losses		42			48			38			37			50			(12.5	)		(16.0	)
	Noninterest expense		119			119			112			120			114			—			4.4
	Net income		40			34			44			50			42			17.6			(4.8	)
	Average loans		13,653			13,956			14,219			14,773			15,355			(2.2	)		(11.1	)
	Average deposits		3,777			3,419			3,365			3,207			2,785			10.5			35.6
	Net loan charge-offs		42			65			68			76			99			(35.4	)		(57.6	)
	Return on average allocated equity		8.11	%		6.81	%		8.82	%		9.71	%		8.12	%		N/A			N/A
	Average full-time equivalent employees		1,184			1,157			1,211			1,246			1,263			2.3			(6.3	)
KeyBank Real Estate Capital
	Total revenue (TE)	$	93		$	94		$	80		$	116		$	93			(1.1	)%		—	%
	Provision for loan losses		1			(1	)		4			1			2			N/M			(50.0	)
	Noninterest expense		37			36			31			41			33			2.8			12.1
	Net income		34			36			28			46			36			(5.6	)		(5.6	)
	Average loans		7,303			7,406			7,497			7,753			7,832			(1.4	)		(6.8	)
	Average deposits		830			712			665			710			590			16.6			40.7
	Net loan charge-offs		1			(1	)		4			1			2			N/M			(50.0	)
	Return on average allocated equity		15.21	%		16.77	%		13.73	%		22.93	%		18.74	%		N/A			N/A
	Average full-time equivalent employees		671			655			635			618			592			2.4			13.3
Key Equipment Finance
	Total revenue (TE)	$	66		$	70		$	68		$	53		$	56			(5.7)	%		17.9	%
	Provision for loan losses		5			9			8			29			12			(44.4	)		(58.3	)
	Noninterest expense		25			27			24			20			22			(7.4	)		13.6
	Net income		22			22			23			3			13			—			69.2
	Average loans		6,828			6,764			6,628			6,139			5,936			.9			15.0
	Average deposits		14			14			13			9			9			—			55.6
	Net loan charge-offs		5			9			7			29			12			(44.4	)		(58.3	)
	Return on average allocated equity		17.08	%		17.54	%		18.96	%		2.60	%		11.67	%		N/A			N/A
	Average full-time equivalent employees		620			613			607			614			606			1.1			2.3

KeyCorp Reports Third Quarter 2003 Earnings
October 16, 2003
Page 17

Line of Business Results (continued)
(dollars in millions)

Investment Management Services

																	Percent change 3Q03 vs.
		3Q03			2Q03			1Q03			4Q02			3Q02			2Q03			3Q02
Summary of operations
	Total revenue (TE)	$	208		$	188		$	192		$	211		$	206			10.6	%		1.0	%
	Provision for loan losses		5			4			2			3			2			25.0			150.0
	Noninterest expense		161			157			157			159			162			2.5			(.6	)
	Net income		26			16			21			30			26			62.5			—
	Average loans		5,100			5,031			4,957			4,890			4,826			1.4			5.7
	Average deposits		6,382			5,939			5,215			4,724			3,695			7.5			72.7
	Net loan charge-offs		5			3			4			3			2			66.7			150.0
	Return on average allocated equity		16.72	%		10.63	%		13.56	%		19.20	%		16.77	%		N/A			N/A
	Average full-time equivalent employees		2,791			2,859			2,967			3,032			3,119			(2.4	)		(10.5	)

N/M = Not Meaningful

N/A = Not Applicable

TE = Taxable Equivalent