KeyCorp (KEY) 8-K Keycorp Reports Third Quarter 2004 Earnings

Exhibit 99.1

Analyst Contact:	Vernon L. Patterson	Media Contact:	Gary Cavano
	216.689.0520		216.689.0517
Investor Relations		Key Media
Information:	www.Key.com/ir	Newsroom:	www.Key.com/newsroom

FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER 2004 EARNINGS

• EPS of $0.61 for the third quarter

• Commercial loan balances up an annualized 14% from the previous quarter

• Continued improvement in asset quality

• Core deposits up an annualized 6% from the previous quarter

CLEVELAND, October 14, 2004 – KeyCorp (NYSE: KEY) today announced third quarter net income of $252 million, or $0.61 per diluted common share, compared with $227 million, or $0.53 per share, for the third quarter of 2003. For the second quarter of 2004, net income was $239 million, or $0.58 per diluted common share.

     “Key reported solid third quarter results with a modest increase in revenue and continued improvement in asset quality,” said Chairman and Chief Executive Officer Henry L. Meyer III. “Contributing to positive momentum was an increase in the net interest margin and stronger loan growth. We continue to be encouraged by the increase in commercial loan balances, which were up an annualized 14% from the prior quarter. The growth in commercial loans was geographically broad-based and spread among a number of industry sectors.

     “Asset quality also continued to improve as nonperforming loans declined for the eighth consecutive quarter and net loan charge-offs as a percentage of average loans fell to their lowest level since the second quarter of 2000.”

     Key expects earnings to be in the range of $0.60 to $0.63 per share for the fourth quarter of 2004.

SUMMARY OF CONSOLIDATED RESULTS

     Taxable-equivalent net interest income rose to $680 million for the third quarter of 2004 from $658 million in the previous quarter. Key’s net interest margin improved 4 basis points to 3.61%, while average earning assets grew by $1.4 billion, due primarily to an increase in the commercial loan portfolio. Compared with the third quarter of 2003, taxable-equivalent net interest income decreased by $10 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 2004 Earnings
October 14, 2004
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     Key’s noninterest income was $436 million for the third quarter of 2004, compared with $446 million for the second quarter. The decrease reflected a $17 million decline in income from investment banking and capital markets activities, due primarily to a reduction in net gains from principal investing and lower income from trading activities. Income from trust and investment services was down $6 million, due to a slowdown in brokerage activities, and net gains from the sales of securities decreased by $7 million. These reductions were substantially offset by a $20 million increase in net gains from loan securitizations and sales, including a $13 million gain from the annual securitization and sale of education loans in the third quarter of 2004. Compared with the year-ago quarter, noninterest income decreased by $27 million, due largely to declines of $18 million in net gains from loan securitizations and sales, and $9 million in service charges on deposit accounts. These reductions were partially offset by net gains of $4 million on the residual values of leased vehicles and equipment in the third quarter of 2004, compared with net losses of $9 million for the same period last year.

     Noninterest expense of $690 million for the third quarter of 2004 was up from $679 million in the prior quarter. Personnel expense rose by $23 million, due to increases in incentive compensation accruals, the cost of employee benefits and costs stemming from stock-based compensation. Nonpersonnel expense decreased by $12 million, reflecting lower costs associated with marketing, real estate acquired through foreclosures, and occupancy. Compared with the third quarter of 2003, noninterest expense decreased by $9 million as reductions in a variety of expense components more than offset higher costs for personnel and computer processing.

ASSET QUALITY

     Key’s provision for loan losses was $51 million for the third quarter of 2004, down from $74 million for the second quarter of 2004 and $123 million for the year-ago quarter.

     Net loan charge-offs for the quarter totaled $76 million, or 0.47% of average loans, compared with $104 million, or 0.67%, for the previous quarter and $123 million, or 0.77%, for the same period last year. Net loan charge-offs as a percentage of average loans were at their lowest level since the second quarter of 2000.

     During the third quarter of 2004, Key’s nonperforming loans decreased by $64 million to $390 million, due primarily to reductions in the middle market, small business and media portfolios. Nonperforming loans represented 0.60% of loans outstanding at September 30, 2004, down from 0.71% at June 30, 2004, and 1.27% at September 30, 2003.

     Key’s allowance for loan losses stood at $1.251 billion, or 1.93% of loans outstanding at September 30, 2004, compared with $1.276 billion, or 1.99% at June 30, 2004, and $1.405 billion, or 2.24% at September 30, 2003. At September 30, 2004, the allowance for loan losses represented 321% of nonperforming loans, compared with 281% at June 30, 2004, and 177% a year ago.

CAPITAL

     Key’s capital ratios continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2004. Key’s tangible equity to tangible assets ratio was 6.57% at quarter end, compared with 6.64% at June 30, 2004, and 6.94% at September 30, 2003.

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October 14, 2004
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     Key’s strong capital position provides the Company with the flexibility to take advantage of future investment opportunities, to repurchase shares when appropriate and to pay dividends. During the third quarter of 2004, Key repurchased 2,500,000 of its common shares. At September 30, 2004, there were 29,461,248 shares remaining for repurchase under the current authorization. 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	3Q04			2Q04			1Q04			4Q03			3Q03
Shares outstanding at beginning of period		407,243			412,153			416,494			419,266			421,074
Issuance of shares under employee benefit and dividend reinvestment plans		980			1,128			3,659			1,228			692
Repurchase of common shares		(2,500	)		(6,038	)		(8,000	)		(4,000	)		(2,500	)
Shares outstanding at end of period		405,723			407,243			412,153			416,494			419,266

LINE OF BUSINESS RESULTS

     The following table 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 3Q04 vs.
dollars in millions	3Q04			2Q04			3Q 03			2Q04			3Q03
Revenue (taxable equivalent)
Consumer Banking	$	592		$	551		$	600			7.4	%		(1.3	)%
Corporate and Investment Banking		365			363			358			.6			2.0
Investment Management Services		193			202			200			(4.5	)		(3.5	)
Other Segments		(2	)		15			16			N/M			N/M
Total segments		1,148			1,131			1,174			1.5			(2.2	)
Reconciling Items		(32	)		(27	)		(21	)		(18.5	)		(52.4	)
Total	$	1,116		$	1,104		$	1,153			1.1			(3.2	)
Net income (loss)
Consumer Banking	$	118		$	100		$	110			18.0	%		7.3	%
Corporate and Investment Banking		112			106			85			5.7			31.8
Investment Management Services		27			23			21			17.4			28.6
Other Segments		3			15			14			(80.0	)		(78.6	)
Total segments		260			244			230			6.6			13.0
Reconciling Items		(8	)		(5	)		(3	)		(60.0	)		(166.7	)
Total	$	252		$	239		$	227			5.4			11.0

N/M = Not Meaningful

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
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Consumer Banking

										Percent change 3Q04 vs.
dollars in millions	3Q04			2Q04			3Q03			2Q04			3Q03
Summary of operations
Net interest income (TE)	$	453		$	431		$	454			5.1	%		(.2	)%
Noninterest income		139			120			146			15.8			(4.8	)
Total revenue (TE)		592			551			600			7.4			(1.3	)
Provision for loan losses		51			46			70			10.9			(27.1	)
Noninterest expense		352			345			355			2.0			(.8	)
Income before income taxes (TE)		189			160			175			18.1			8.0
Allocated income taxes and TE adjustments		71			60			65			18.3			9.2
Net income	$	118		$	100		$	110			18.0			7.3
Percent of consolidated net income		47	%		42	%		49	%		N/A			N/A
Average balances
Loans	$	29,331		$	29,362		$	29,179			(.1	)%		.5	%
Total assets		31,855			31,975			31,687			(.4	)		.5
Deposits		35,574			35,025			35,062			1.6			1.5

TE = Taxable Equivalent, N/A = Not Applicable

Additional Consumer Banking Data

										Percent change 3Q 04 vs.
dollars in millions	3Q 04			2Q 04			3Q 03			2Q 04			3Q 03
Average deposits outstanding
Noninterest-bearing	$	5,750		$	5,640		$	5,746			2.0	%		.1	%
Money market deposit accounts and other savings		16,973			16,284			15,586			4.2			8.9
Time		12,851			13,101			13,730			(1.9	)		(6.4	)
Total deposits	$	35,574		$	35,025		$	35,062			1.6			1.5
Home equity loans
Retail Banking and Small Business:
Average balance	$	8,810		$	8,608		$	8,257
Average loan-to-value ratio		72	%		72	%		72	%
Percent first lien positions		60			60			58
National Home Equity:
Average balance	$	4,502		$	4,504		$	5,164
Average loan-to-value ratio		71	%		72	%		74	%
Percent first lien positions		76			78			82
Other data
On-line clients / household penetration		938,540/44	%		882,088/42	%		722,172/37	%
KeyCenters		921			902			900
Automated teller machines		2,187			2,166			2,158

     Net income for Consumer Banking was $118 million for the third quarter of 2004, representing an $8 million increase from the year-ago quarter. The increase was attributable to a substantially lower provision for loan losses, offset in part by a decrease in noninterest income.

     The provision for loan losses decreased by $19 million as a result of improved asset quality in Consumer Finance and Small Business lines of business.

     Noninterest income decreased by $7 million, or 5%, from the third quarter of 2003, due largely to an $11 million decline in net gains from loan securitizations and sales in the Consumer Finance line of business and a $6 million decrease in service charges on deposit accounts, primarily in Retail Banking. These reductions were offset partially by a $7 million decrease in net losses incurred on the residual values of leased vehicles.

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October 14, 2004
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Corporate and Investment Banking

										Percent change 3Q04 vs.
dollars in millions	3Q04			2Q04			3Q03			2Q04			3Q03
Summary of operations
Net interest income (TE)	$	234		$	228		$	235			2.6	%		(.4	)%
Noninterest income		131			135			123			(3.0	)		6.5
Total revenue (TE)		365			363			358			.6			2.0
Provision for loan losses		(1	)		25			48			N/M			N/M
Noninterest expense		187			169			174			10.7			7.5
Income before income taxes (TE)		179			169			136			5.9			31.6
Allocated income taxes and TE adjustments		67			63			51			6.3			31.4
Net income	$	112		$	106		$	85			5.7			31.8
Percent of consolidated net income		44	%		44	%		37	%		N/A			N/A
Average balances
Loans	$	29,078		$	27,854		$	27,901			4.4	%		4.2	%
Total assets		33,993			32,788			32,157			3.7			5.7
Deposits		5,146			4,958			4,566			3.8			12.7

TE = Taxable Equivalent, N/M = Not Meaningful, N/A = Not Applicable

     Net income for Corporate and Investment Banking was $112 million for the third quarter of 2004, up from $85 million for the same period last year. A significant decrease in the provision for loan losses and growth in noninterest income drove the improvement and more than offset an increase in noninterest expense.

     The provision for loan losses decreased by $49 million, reflecting improved asset quality in the Corporate Banking line of business.

     Noninterest income rose by $8 million, or 7%, due largely to increases of $5 million in both non-yield-related loan fees and income from investment banking and capital markets activities. In addition, Key Equipment Finance recorded net gains of $5 million on the residual values of leased equipment in the third quarter of 2004, compared with a small net loss in the year-ago quarter. These favorable results were offset in part by a decrease in net gains from loan sales.

     Noninterest expense increased by $13 million, or 7%, due primarily to an $8 million increase in personnel expense.

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October 14, 2004
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Investment Management Services

										Percent change 3Q04 vs.
dollars in millions	3Q04			2Q04			3Q03			2Q04			3Q03
Summary of operations
Net interest income (TE)	$	60		$	59		$	60			1.7	%		—	%
Noninterest income		133			143			140			(7.0	)		(5.0	)
Total revenue (TE)		193			202			200			(4.5	)		(3.5	)
Provision for loan losses		1			3			5			(66.7	)		(80.0	)
Noninterest expense		149			162			162			(8.0	)		(8.0	)
Income before income taxes (TE)		43			37			33			16.2			30.3
Allocated income taxes and TE adjustments		16			14			12			14.3			33.3
Net income	$	27		$	23		$	21			17.4			28.6
Percent of consolidated net income		11	%		10	%		9	%		N/A			N/A
Average balances
Loans	$	5,275		$	5,226		$	5,100			.9	%		3.4	%
Total assets		6,614			6,567			6,228			.7			6.2
Deposits		7,114			7,188			6,382			(1.0	)		11.5

TE = Taxable Equivalent, N/A = Not Applicable

Additional Investment Management Services Data

dollars in billions	3Q04		2Q04		3Q03
Assets under management	$	70.9	$	69.7	$	65.0
Nonmanaged and brokerage assets		67.6		68.1		63.4

     Net income for Investment Management Services was $27 million for the third quarter of 2004, up from $21 million for the third quarter of last year. The positive effects of a decrease in noninterest expense and a reduction in the provision for loan losses more than offset a decline in noninterest income.

     Noninterest expense declined by $13 million, or 8%, due to a variety of factors, including decreases in computer processing costs and indirect charges.

     The provision for loan losses decreased by $4 million, reflecting improved asset quality in the McDonald Financial Group.

     Noninterest income decreased by $7 million, or 5%, due largely to a $4 million decline in brokerage commissions and lower income from the sales of annuities.

Other Segments

     Other segments consist primarily of Treasury and principal investing. These segments generated net income of $3 million for the third quarter of 2004, compared with $14 million for the same period last year. Declines in net gains from principal investing and the sales of securities, lower income from corporate-owned life insurance and additional revenue recorded in the third quarter of 2003 in connection with the demutualization of an insurance company in which Key was a policy holder contributed to the decrease.

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October 14, 2004
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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 Financeincludes 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 federal and private education loans to students and their parents and processes payments on loans from private schools to 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 an 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, equity and debt 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 Servicesincludes 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.

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October 14, 2004
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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.

     Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $88 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 921 KeyCenters and offices; a network of 2,187 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 14, 2004. A tape of the call will be available through October 21.

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; failure of the economy to continue to improve, which could materially impact credit quality trends and the ability to generate loans; declines or disruptions in the stock or bond markets; delay in or inability to execute strategic initiatives designed to grow revenues and/or manage expenses; inaccurate or erroneous assumptions made in connection with various modeling techniques; 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 2004 Earnings
October 14, 2004
Page 9

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

	Three months ended
	9-30-04			6-30-04			9-30-03
Summary of operations
Net interest income (TE)	$	680		$	658		$	690
Noninterest income		436			446			463
Total revenue (TE)		1,116			1,104			1,153
Provision for loan losses		51			74			123
Noninterest expense		690			679			699
Net income		252			239			227
Per common share
Net income	$	.62		$	.58		$	.54
Net income — assuming dilution		.61			.58			.53
Cash dividends paid		.31			.31			.305
Book value at period end		17.12			16.77			16.64
Market price at period end		31.60			29.89			25.57
Performance ratios
Return on average total assets		1.16	%		1.13	%		1.06	%
Return on average equity		14.62			13.97			13.06
Net interest margin (TE)		3.61			3.57			3.73
Capital ratios at period end
Equity to assets		7.85	%		7.92	%		8.26	%
Tangible equity to tangible assets		6.57			6.64			6.94
Tier 1 risk-based capitala		7.74			7.93			8.23
Total risk-based capitala		11.66			12.07			12.48
Leveragea		8.27			8.34			8.37
Asset quality
Net loan charge-offs	$	76		$	104		$	123
Net loan charge-offs to average loans		.47	%		.67	%		.77	%
Allowance for loan losses	$	1,251		$	1,276		$	1,405
Allowance for loan losses to period-end loans		1.93	%		1.99	%		2.24	%
Allowance for loan losses to nonperforming loans		320.77			281.06			176.73
Nonperforming loans at period end	$	390		$	454		$	795
Nonperforming assets at period end		460			540			862
Nonperforming loans to period-end loans		.60	%		.71	%		1.27	%
Nonperforming assets to period-end loans plus OREO and other nonperforming assets		.71			.84			1.37
Other data
Average full-time equivalent employees		19,635			19,514			20,059
KeyCenters		921			902			900
Taxable-equivalent adjustment	$	22		$	22		$	13

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October 14, 2004
Page 10

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

	Nine months ended
	9-30-04			9-30-03
Summary of operations
Net interest income (TE)	$	2,023		$	2,103
Noninterest income		1,313			1,294
Total revenue (TE)		3,336			3,397
Provision for loan losses		206			378
Noninterest expense		2,028			2,044
Net income		741			669
Per common share
Net income	$	1.80		$	1.58
Net income — assuming dilution		1.78			1.57
Cash dividends paid		.93			.915
Performance ratios
Return on average total assets		1.16	%		1.06	%
Return on average equity		14.36			12.98
Net interest margin (TE)		3.64			3.81
Asset quality
Net loan charge-offs	$	291		$	425
Net loan charge-offs to average loans		.61	%		.90	%
Other data
Average full-time equivalent employees		19,577			20,174
Taxable-equivalent adjustment	$	68		$	49

(a) 9-30-04 ratio is estimated.

TE = Taxable Equivalent

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October 14, 2004
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Consolidated Balance Sheets
(dollars in millions)

	9-30-04			6-30-04			9-30-03
Assets
Loans	$	64,981		$	64,016		$	62,723
Investment securities		78			81			106
Securities available for sale		7,182			7,023			7,550
Short-term investments		2,753			2,639			1,776
Other investments		1,341			1,231			1,103
Total earning assets		76,335			74,990			73,258
Allowance for loan losses		(1,251	)		(1,276	)		(1,405	)
Cash and due from banks		2,984			2,313			2,398
Premises and equipment		599			600			614
Goodwill		1,179			1,150			1,154
Other intangible assets		32			31			41
Corporate-owned life insurance		2,574			2,550			2,483
Accrued income and other assets		6,003			5,863			5,917
Total assets	$	88,455		$	86,221		$	84,460
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	21,165		$	19,956		$	18,389
Savings deposits		1,976			2,014			2,079
Certificates of deposit ($100,000 or more)		4,715			4,630			4,887
Other time deposits		10,212			10,342			11,034
Total interest-bearing		38,068			36,942			36,389
Noninterest-bearing		12,008			10,940			10,947
Deposits in foreign office — interest-bearing		5,767			4,541			1,403
Total deposits		55,843			52,423			48,739
Federal funds purchased and securities sold under repurchase agreements		3,322			3,794			4,804
Bank notes and other short-term borrowings		2,853			2,598			2,707
Accrued expense and other liabilities		6,047			5,969			5,891
Long-term debt		13,444			14,608			15,342
Total liabilities		81,509			79,392			77,483
Shareholders’ equity
Preferred stock		—			—			—
Common shares		492			492			492
Capital surplus		1,477			1,469			1,454
Retained earnings		7,197			7,072			6,732
Treasury stock		(2,172	)		(2,121	)		(1,718	)
Accumulated other comprehensive income (loss)		(48	)		(83	)		17
Total shareholders’ equity		6,946			6,829			6,977
Total liabilities and shareholders’ equity	$	88,455		$	86,221		$	84,460
Common shares outstanding (000)		405,723			407,243			419,266

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October 14, 2004
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Consolidated Statements of Income
(dollars in millions, except per share amounts)

	Three months ended						Nine months ended
	9-30-04		6-30-04		9-30-03		9-30-04		9-30-03
Interest income
Loans	$	847	$	816	$	880	$	2,496	$	2,694
Taxable investment securities		1		—		—		1		—
Tax-exempt investment securities		1		1		2		3		5
Securities available for sale		84		78		77		250		274
Short-term investments		9		9		6		27		22
Other investments		10		8		6		26		19
Total interest income		952		912		971		2,803		3,014
Interest expense
Deposits		171		161		168		493		539
Federal funds purchased and securities sold under repurchase agreements		17		10		12		37		41
Bank notes and other short-term borrowings		8		9		13		29		46
Long-term debt, including capital securities		98		96		101		289		334
Total interest expense		294		276		294		848		960
Net interest income		658		636		677		1,955		2,054
Provision for loan losses		51		74		123		206		378
		607		562		554		1,749		1,676
Noninterest income
Trust and investment services income		135		141		138		421		399
Service charges on deposit accounts		84		86		93		254		276
Investment banking and capital markets income		52		69		53		163		142
Letter of credit and loan fees		42		40		37		119		99
Corporate-owned life insurance income		25		25		27		77		81
Net gains from loan securitizations and sales		21		1		39		47		68
Electronic banking fees		22		22		20		62		61
Net securities gains		—		7		2		7		9
Other income		55		55		54		163		159
Total noninterest income		436		446		463		1,313		1,294
Noninterest expense
Personnel		394		371		380		1,138		1,114
Net occupancy		57		61		56		176		171
Computer processing		49		48		43		141		131
Equipment		28		30		35		89		101
Marketing		26		30		30		79		88
Professional fees		27		29		30		81		87
Other expense		109		110		125		324		352
Total noninterest expense		690		679		699		2,028		2,044
Income before income taxes		353		329		318		1,034		926
Income taxes		101		90		91		293		257
Net income	$	252	$	239	$	227	$	741	$	669
Net income per common share	$	.62	$	.58	$	.54	$	1.80	$	1.58
Net income per common share — assuming dilution		.61		.58		.53		1.78		1.57
Weighted-average common shares outstanding (000)		407,187		410,292		421,971		411,371		423,697
Weighted-average common shares and potential common shares outstanding (000)		411,575		414,908		425,669		416,002		426,968

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 13

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

	Third Quarter 2004								Second Quarter 2004								Third Quarter 2003
	Average								Average								Average
	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans:a,b
Commercial, financial and agricultural	$	18,088		$	198		4.34	%	$	17,392		$	189		4.36	%	$	17,188		$	202		4.65	%
Real estate — commercial mortgage		6,448			81		4.99			6,071			74		4.94			5,859			77		5.21
Real estate — construction		4,825			62		5.15			4,716			56		4.79			5,196			66		5.05
Commercial lease financing		8,808			126		5.72			8,729			127		5.83			7,995			118		5.91
Total commercial loans		38,169			467		4.87			36,908			446		4.86			36,238			463		5.07
Real estate — residential		1,511			21		5.79			1,568			24		6.09			1,707			28		6.43
Home equity		14,844			212		5.67			14,631			201		5.53			14,862			218		5.80
Consumer — direct		2,059			38		7.35			2,058			38		7.41			2,162			39		7.19
Consumer — indirect lease financing		144			4		10.07			199			5		9.74			460			11		9.60
Consumer — indirect other		5,153			97		7.56			5,137			95		7.39			5,123			105		8.23
Total consumer loans		23,711			372		6.26			23,593			363		6.17			24,314			401		6.55
Loans held for sale		2,476			30		4.74			2,602			28		4.28			2,526			29		4.53
Total loans		64,356			869		5.38			63,103			837		5.33			63,078			893		5.62
Taxable investment securities		14			1		4.22			16			—		4.20			14			—		4.46
Tax-exempt investment securitiesa		65			1		9.64			74			2		9.73			91			2		9.76
Total investment securities		79			2		8.65			90			2		8.72			105			2		9.07
Securities available for salea,c		6,982			84		4.88			7,130			78		4.37			7,877			77		3.91
Short-term investments		2,527			9		1.50			2,384			9		1.44			1,531			6		1.70
Other investmentsc		1,328			10		2.98			1,167			8		2.79			1,032			6		2.68
Total earning assets		75,272			974		5.16			73,874			934		5.07			73,623			984		5.32
Allowance for loan losses		(1,270	)							(1,237	)							(1,396	)
Accrued income and other assets		12,522								12,678								12,495
Total assets	$	86,524							$	85,315							$	84,722
Liabilities
NOW and money market deposit accounts	$	20,454			39		.77		$	19,753			33		.67		$	18,381			35		.75
Savings deposits		1,986			2		.22			2,040			1		.23			2,092			2		.48
Certificates of deposit ($100,000 or more)d		4,852			44		3.60			4,727			44		3.77			4,898			46		3.78
Other time deposits		10,348			73		2.81			10,591			76		2.87			11,073			81		2.89
Deposits in foreign office		3,593			13		1.47			2,635			7		1.05			1,627			4		1.04
Total interest-bearing deposits		41,233			171		1.65			39,746			161		1.63			38,071			168		1.76
Federal funds purchased and securities sold under repurchase agreements		5,032			17		1.35			4,483			10		.93			5,133			12		.93
Bank notes and other short-term borrowings		2,614			8		1.33			2,512			9		1.43			2,559			13		2.05
Long-term debtd		13,415			98		3.01			14,465			96		2.74			15,421			101		2.68
Total interest-bearing liabilities		62,294			294		1.90			61,206			276		1.82			61,184			294		1.93
Noninterest-bearing deposits		11,285								11,010								10,628
Accrued expense and other liabilities		6,090								6,220								6,016
Total liabilities		79,669								78,436								77,828
Shareholders’ equity		6,855								6,879								6,894
Total liabilities and shareholders’ equity	$	86,524							$	85,315							$	84,722
Interest rate spread (TE)							3.26	%							3.25	%							3.39	%
Net interest income (TE) and net interest margin (TE)					680		3.61	%					658		3.57	%					690		3.73	%
TE adjustmenta					22								22								13
Net interest income, GAAP basis				$	658							$	636							$	677

(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 = Accounting Principles Generally Accepted in the United States

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 14

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

	Nine months ended September 30, 2004								Nine months ended September 30, 2003
	Average								Average
	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans:a,b
Commercial, financial and agricultural	$	17,508		$	577		4.40	%	$	17,267		$	626		4.84	%
Real estate — commercial mortgage		6,091			227		4.97			5,941			239		5.36
Real estate — construction		4,799			176		4.91			5,401			206		5.12
Commercial lease financing		8,692			380		5.83			7,890			360		6.08
Total commercial loans		37,090			1,360		4.90			36,499			1,431		5.23
Real estate — residential		1,556			70		6.04			1,804			90		6.55
Home equity		14,813			623		5.61			14,436			654		6.06
Consumer — direct		2,067			116		7.48			2,142			119		7.43
Consumer — indirect lease financing		202			15		9.82			610			43		9.47
Consumer — indirect other		5,226			297		7.58			5,015			317		8.46
Total consumer loans		23,864			1,121		6.27			24,007			1,223		6.81
Loans held for sale		2,468			81		4.37			2,479			86		4.64
Total loans		63,422			2,562		5.39			62,985			2,740		5.81
Taxable investment securities		16			1		4.26			7			—		5.08
Tax-exempt investment securitiesa		72			5		9.70			108			8		9.33
Total investment securities		88			6		8.73			115			8		9.07
Securities available for salea,c		7,209			250		4.65			7,997			274		4.59
Short-term investments		2,258			27		1.60			1,581			22		1.88
Other investmentsc		1,203			26		2.86			991			19		2.60
Total earning assets		74,180			2,871		5.17			73,669			3,063		5.55
Allowance for loan losses		(1,295	)							(1,414	)
Accrued income and other assets		12,573								12,210
Total assets	$	85,458							$	84,465
Liabilities
NOW and money market deposit accounts	$	19,699			101		.69		$	17,628			118		.90
Savings deposits		2,026			4		.23			2,073			8		.54
Certificates of deposit ($100,000 or more)d		4,821			134		3.72			4,766			141		3.98
Other time deposits		10,631			229		2.88			11,433			255		2.98
Deposits in foreign office		2,801			25		1.21			1,930			17		1.18
Total interest-bearing deposits		39,978			493		1.65			37,830			539		1.91
Federal funds purchased and securities sold under repurchase agreements		4,529			37		1.09			5,004			41		1.10
Bank notes and other short-term borrowings		2,577			29		1.52			2,583			46		2.41
Long-term debt, including capital securitiesd		14,366			289		2.79			16,330			334		2.84
Total interest-bearing liabilities		61,450			848		1.86			61,747			960		2.10
Noninterest-bearing deposits		10,986								10,159
Accrued expense and other liabilities		6,129								5,670
Total liabilities		78,565								77,576
Shareholders’ equity		6,893								6,889
Total liabilities and shareholders’ equity	$	85,458							$	84,465
Interest rate spread (TE)							3.31	%							3.45	%
Net interest income (TE) and net interest margin (TE)					2,023		3.64	%					2,103		3.81	%
TE adjustmenta					68								49
Net interest income, GAAP basis				$	1,955							$	2,054
Capital securities		—			—				$	838		$	36

(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 = Accounting Principles Generally Accepted in the United States

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 15

Noninterest Income
(in millions)

	Three months ended						Nine months ended
	9-30-04		6-30-04		9-30-03		9-30-04		9-30-03
Trust and investment services incomea	$	135	$	141	$	138	$	421	$	399
Service charges on deposit accounts		84		86		93		254		276
Investment banking and capital markets incomea		52		69		53		163		142
Letter of credit and loan fees		42		40		37		119		99
Corporate-owned life insurance income		25		25		27		77		81
Net gains from loan securitizations and sales		21		1		39		47		68
Electronic banking fees		22		22		20		62		61
Net securities gains		—		7		2		7		9
Other income:
Insurance income		10		13		12		34		38
Loan securitization servicing fees		2		1		2		4		6
Credit card fees		3		3		2		9		8
Miscellaneous income		40		38		38		116		107
Total other income		55		55		54		163		159
Total noninterest income	$	436	$	446	$	463	$	1,313	$	1,294

(a) Additional detail provided in tables below.

Trust and Investment Services Income
(in millions)

	Three months ended						Nine months ended
	9-30-04		6-30-04		9-30-03		9-30-04		9-30-03
Brokerage commissions and fee income	$	61	$	66	$	66	$	197	$	196
Personal asset management and custody fees		41		42		39		125		111
Institutional asset management and custody fees		9		10		10		28		29
All other fees		24		23		23		71		63
Total trust and investment services income	$	135	$	141	$	138	$	421	$	399

Investment Banking and Capital Markets Income
(in millions)

	Three months ended							Nine months ended
	9-30-04			6-30-04		9-30-03		9-30-04		9-30-03
Investment banking income	$	36		$	31	$	24	$	92	$	70
Net gains from principal investing		10			19		16		39		32
Foreign exchange income		7			12		10		31		25
Net gain from sale of other investments		1			—		—		1		—
Dealer trading and derivatives income (loss)		(2	)		7		3		—		15
Total investment banking and capital markets income	$	52		$	69	$	53	$	163	$	142

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 16

Noninterest Expense
(dollars in millions)

	Three months ended						Nine months ended
	9-30-04		6-30-04		9-30-03		9-30-04		9-30-03
Personnela	$	394	$	371	$	380	$	1,138	$	1,114
Net occupancy		57		61		56		176		171
Computer processing		49		48		43		141		131
Equipment		28		30		35		89		101
Marketing		26		30		30		79		88
Professional fees		27		29		30		81		87
Other expense:
Postage and delivery		13		13		15		39		43
Telecommunications		8		7		8		22		24
Franchise and business taxes		9		9		10		17		35
OREO expense, net		3		7		5		14		10
Miscellaneous expense		76		74		87		232		240
Total other expense		109		110		125		324		352
Total noninterest expense	$	690	$	679	$	699	$	2,028	$	2,044
Average full-time equivalent employees		19,635		19,514		20,059		19,577		20,174

(a) Additional detail provided in table below.

Personnel Expense
(in millions)

	Three months ended						Nine months ended
	9-30-04		6-30-04		9-30-03		9-30-04		9-30-03
Salaries	$	213	$	210	$	215	$	632	$	647
Incentive compensation		103		92		94		280		244
Employee benefits		63		59		63		193		198
Stock-based compensation		12		8		8		27		15
Severance		3		2		—		6		10
Total personnel expense	$	394	$	371	$	380	$	1,138	$	1,114

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 17

Loan Composition
(dollars in millions)

							Percent change 9-30-04 vs.
	9-30-04		6-30-04		9-30-03		6-30-04			9-30-03
Commercial, financial and agricultural	$	18,118	$	17,721	$	17,118		2.2	%		5.8	%
Commercial real estate:
Commercial mortgage		6,710		6,312		5,822		6.3			15.3
Construction		5,120		4,863		5,236		5.3			(2.2	)
Total commercial real estate loans		11,830		11,175		11,058		5.9			7.0
Commercial lease financing		8,969		8,792		8,123		2.0			10.4
Total commercial loans		38,917		37,688		36,299		3.3			7.2
Real estate — residential mortgage		1,509		1,542		1,665		(2.1	)		(9.4	)
Home equity		14,950		14,753		14,879		1.3			.5
Consumer — direct		2,017		2,074		2,154		(2.7	)		(6.4	)
Consumer — indirect:
Automobile lease financing		120		170		400		(29.4	)		(70.0	)
Automobile loans		1,862		1,910		2,093		(2.5	)		(11.0	)
Marine		2,648		2,640		2,489		.3			6.4
Other		620		598		561		3.7			10.5
Total consumer — indirect loans		5,250		5,318		5,543		(1.3	)		(5.3	)
Total consumer loans		23,726		23,687		24,241		.2			(2.1	)
Loans held for sale:
Real estate — commercial mortgage		314		369		210		(14.9	)		49.5
Real estate — residential mortgage		24		22		59		9.1			(59.3	)
Home equity		21		13		—		61.5			N/M
Education		1,979		2,237		1,914		(11.5	)		3.4
Total loans held for sale		2,338		2,641		2,183		(11.5	)		7.1
Total loans	$	64,981	$	64,016	$	62,723		1.5			3.6

N/M = Not Meaningful

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 18

Summary of Loan Loss Experience
(dollars in millions)

	Three months ended									Nine months ended
	9-30-04			6-30-04			9-30-03			9-30-04			9-30-03
Average loans outstanding during the period	$	64,356		$	63,103		$	63,078		$	63,422		$	62,985
Allowance for loan losses at beginning of period	$	1,276		$	1,306		$	1,405		$	1,406		$	1,452
Loans charged off:
Commercial, financial and agricultural		35			43			61			130			225
Real estate — commercial mortgage		6			10			11			24			36
Real estate — construction		—			5			1			5			5
Total commercial real estate loans		6			15			12			29			41
Commercial lease financing		9			15			14			34			45
Total commercial loans		50			73			87			193			311
Real estate — residential mortgage		6			4			2			12			5
Home equity		9			11			15			37			44
Consumer — direct		9			11			12			32			37
Consumer — indirect lease financing		1			2			3			6			12
Consumer — indirect other		38			47			40			130			119
Total consumer loans		63			75			72			217			217
		113			148			159			410			528
Recoveries:
Commercial, financial and agricultural		10			13			11			36			27
Real estate — commercial mortgage		1			1			2			3			10
Real estate — construction		—			4			—			4			3
Total commercial real estate loans		1			5			2			7			13
Commercial lease financing		3			4			6			10			11
Total commercial loans		14			22			19			53			51
Real estate — residential mortgage		—			1			—			1			1
Home equity		2			1			1			4			4
Consumer — direct		3			2			3			7			7
Consumer — indirect lease financing		1			1			2			3			5
Consumer — indirect other		17			17			11			51			35
Total consumer loans		23			22			17			66			52
		37			44			36			119			103
Net loans charged off		(76	)		(104	)		(123	)		(291	)		(425	)
Provision for loan losses		51			74			123			206			378
Reclassification of allowance for credit losses on lending-related commitmentsa		—			—			—			(70	)		—
Allowance for loan losses at end of period	$	1,251		$	1,276		$	1,405		$	1,251		$	1,405
Net loan charge-offs to average loans		.47	%		.67	%		.77	%		.61	%		.90	%
Allowance for loan losses to period-end loans		1.93			1.99			2.24			1.93			2.24
Allowance for loan losses to nonperforming loans		320.77			281.06			176.73			320.77			176.73

(a) Included in accrued expenses and other liabilities on the consolidated balance sheet.

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 19

Summary of Nonperforming Assets and Past Due Loans
(dollars in millions)

	9-30-04			6-30-04			3-31-04			12-31-03			9-30-03
Commercial, financial and agricultural	$	61		$	114		$	191		$	252		$	345
Real estate — commercial mortgage		49			61			72			85			89
Real estate — construction		1			1			12			25			38
Total commercial real estate loans		50			62			84			110			127
Commercial lease financing		74			59			84			103			108
Total commercial loans		185			235			359			465			580
Real estate — residential mortgage		36			38			39			39			36
Home equity		149			151			161			153			151
Consumer — direct		4			13			10			14			12
Consumer — indirect lease financing		1			2			2			3			3
Consumer — indirect other		15			15			16			20			13
Total consumer loans		205			219			228			229			215
Total nonperforming loans		390			454			587			694			795
OREO		60			71			76			61			69
Allowance for OREO losses		(5	)		(8	)		(5	)		(4	)		(4	)
OREO, net of allowance		55			63			71			57			65
Other nonperforming assets		15			23			12			2			2
Total nonperforming assets	$	460		$	540		$	670		$	753		$	862
Accruing loans past due 90 days or more	$	139		$	114		$	127		$	152		$	165
Accruing loans past due 30 through 89 days		602			622			559			613			710
Nonperforming loans to period-end loans		.60	%		.71	%		.94	%		1.11	%		1.27	%
Nonperforming assets to period-end loans plus OREO and other nonperforming assets		.71			.84			1.07			1.20			1.37

Summary of Changes in Nonperforming Loans
(in millions)

	3Q04			2Q04			1Q04			4Q03			3Q03
Balance at beginning of period	$	454		$	587		$	694		$	795		$	837
Loans placed on nonaccrual status		94			68			145			111			240
Charge-offs		(76	)		(104	)		(111	)		(123	)		(123	)
Loans sold		(35	)		(33	)		(58	)		(40	)		(73	)
Payments		(32	)		(62	)		(56	)		(46	)		(73	)
Transfers to OREO		—			—			(11	)		—			(6	)
Loans returned to accrual status		(15	)		(2	)		(16	)		(3	)		(7	)
Balance at end of period	$	390		$	454		$	587		$	694		$	795

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 20

Line of Business Results
(dollars in millions)

Consumer Banking

																Percent change 3Q04 vs.
	3Q04			2Q04			1Q04			4Q03			3Q03			2Q04			3Q03
Summary of operations
Total revenue (TE)	$	592		$	551		$	572		$	575		$	600			7.4	%		(1.3	)%
Provision for loan losses		51			46			59			68			70			10.9			(27.1	)
Noninterest expense		352			345			335			352			355			2.0			(.8	)
Net income		118			100			111			97			110			18.0			7.3
Average loans		29,331			29,362			29,736			29,244			29,179			(.1	)		.5
Average deposits		35,574			35,025			34,742			35,008			35,062			1.6			1.5
Net loan charge-offs		52			61			71			68			70			(14.8	)		(25.7	)
Return on average allocated equity		23.25	%		19.87	%		21.62	%		18.71	%		21.07	%		N/A			N/A
Average full-time equivalent employees		8,227			8,130			8,129			8,129			8,231			1.2			—
Supplementary information (lines of business)
Retail Banking
Total revenue (TE)	$	321		$	312		$	312		$	324		$	330			2.9	%		(2.7	)%
Provision for loan losses		15			10			15			14			14			50.0			7.1
Noninterest expense		212			208			199			207			211			1.9			.5
Net income		59			58			61			65			66			1.7			(10.6	)
Average loans		10,771			10,557			10,369			10,264			10,178			2.0			5.8
Average deposits		30,116			29,796			29,791			29,894			30,051			1.1			.2
Net loan charge-offs		15			10			15			14			14			50.0			7.1
Return on average allocated equity		38.35	%		39.07	%		41.16	%		43.20	%		43.86	%		N/A			N/A
Average full-time equivalent employees		6,225			6,137			6,092			6,103			6,207			1.4			.3
Small Business
Total revenue (TE)	$	97		$	95		$	92		$	98		$	97			2.1	%		—	%
Provision for loan losses		12			12			13			16			17			—			(29.4	)
Noninterest expense		55			52			51			52			52			5.8			5.8
Net income		19			19			18			18			18			—			5.6
Average loans		4,420			4,479			4,445			4,452			4,502			(1.3	)		(1.8	)
Average deposits		5,047			4,865			4,582			4,731			4,618			3.7			9.3
Net loan charge-offs		12			14			14			16			17			(14.3	)		(29.4	)
Return on average allocated equity		19.68	%		20.06	%		19.00	%		18.69	%		18.69	%		N/A			N/A
Average full-time equivalent employees		419			416			415			380			382			.7			9.7
Consumer Finance
Total revenue (TE)	$	174		$	144		$	168		$	153		$	173			20.8	%		.6	%
Provision for loan losses		24			24			31			38			39			—			(38.5	)
Noninterest expense		85			85			85			93			92			—			(7.6	)
Net income		40			23			32			14			26			73.9			53.8
Average loans		14,140			14,326			14,922			14,528			14,499			(1.3	)		(2.5	)
Average deposits		411			364			369			383			393			12.9			4.6
Net loan charge-offs		25			37			42			38			39			(32.4	)		(35.9	)
Return on average allocated equity		15.56	%		8.84	%		11.83	%		5.15	%		9.45	%		N/A			N/A
Average full-time equivalent employees		1,583			1,577			1,622			1,646			1,642			.4			(3.6	)

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 21

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

Corporate and Investment Banking

																Percent change 3Q04 vs.
	3Q04			2Q04			1Q04			4Q03			3Q03			2Q04			3Q03
Summary of operations
Total revenue (TE)	$	365		$	363		$	354		$	390		$	358			.6	%		2.0	%
Provision for loan losses		(1	)		25			21			49			48			N/M			N/M
Noninterest expense		187			169			164			182			174			10.7			7.5
Net income		112			106			106			100			85			5.7			31.8
Average loans		29,078			27,854			27,221			27,418			27,901			4.4			4.2
Average deposits		5,146			4,958			4,756			4,780			4,566			3.8			12.7
Net loan charge-offs		23			40			39			49			48			(42.5	)		(52.1	)
Return on average allocated equity		14.87	%		14.24	%		14.16	%		13.09	%		11.08	%		N/A			N/A
Average full-time equivalent employees		2,487			2,435			2,412			2,429			2,433			2.1			2.2
Supplementary information (lines of business)
Corporate Banking
Total revenue (TE)	$	190		$	198		$	189		$	200		$	196			(4.0	)%		(3.1	)%
Provision for loan losses		(7	)		25			14			37			43			N/M			N/M
Noninterest expense		110			102			104			113			108			7.8			1.9
Net income		54			45			44			32			28			20.0			92.9
Average loans		13,106			12,558			12,216			12,369			12,813			4.4			2.3
Average deposits		3,767			3,742			3,615			3,655			3,576			.7			5.3
Net loan charge-offs		13			36			31			37			43			(63.9	)		(69.8	)
Return on average allocated equity		13.70	%		11.38	%		11.04	%		7.78	%		6.62	%		N/A			N/A
Average full-time equivalent employees		1,167			1,130			1,131			1,140			1,125			3.3			3.7
KeyBank Real Estate Capital
Total revenue (TE)	$	104		$	91		$	88		$	121		$	102			14.3	%		2.0	%
Provision for loan losses		—			(4	)		1			4			—			(100.0	)		N/M
Noninterest expense		45			42			37			43			41			7.1			9.8
Net income		37			33			31			46			38			12.1			(2.6	)
Average loans		8,286			7,752			7,624			8,062			8,260			6.9			.3
Average deposits		1,366			1,202			1,127			1,111			976			13.6			40.0
Net loan charge-offs (recoveries)		3			(1	)		2			4			—			(400.0	)		N/M
Return on average allocated equity		15.95	%		14.67	%		13.60	%		19.64	%		16.79	%		N/A			N/A
Average full-time equivalent employees		678			673			668			674			688			.7			(1.5	)
Key Equipment Finance
Total revenue (TE)	$	71		$	74		$	77		$	69		$	60			(4.1	)%		18.3	%
Provision for loan losses		6			4			5			8			5			50.0			20.0
Noninterest expense		32			25			23			26			25			28.0			28.0
Net income		21			28			31			22			19			(25.0	)		10.5
Average loans		7,686			7,544			7,381			6,987			6,828			1.9			12.6
Average deposits		13			14			14			14			14			(7.1	)		(7.1	)
Net loan charge-offs		7			5			6			8			5			40.0			40.0
Return on average allocated equity		16.51	%		22.66	%		25.45	%		18.53	%		16.07	%		N/A			N/A
Average full-time equivalent employees		642			632			613			615			620			1.6			3.5

KeyCorp Reports Third Quarter 2004 Earnings
October 14, 2004
Page 22

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

Investment Management Services

																Percent change 3Q04 vs.
	3Q04			2Q04			1Q04			4Q03			3Q03			2Q04			3Q03
Summary of operations
Total revenue (TE)	$	193		$	202		$	204		$	210		$	200			(4.5	)%		(3.5	)%
Provision for loan losses		1			3			1			6			5			(66.7	)		(80.0	)
Noninterest expense		149			162			152			160			162			(8.0	)		(8.0	)
Net income		27			23			32			27			21			17.4			28.6
Average loans		5,275			5,226			5,140			5,151			5,100			.9			3.4
Average deposits		7,114			7,188			6,908			6,779			6,382			(1.0	)		11.5
Net loan charge-offs		1			3			1			6			5			(66.7	)		(80.0	)
Return on average allocated equity		17.58	%		15.37	%		21.20	%		17.45	%		13.93	%		N/A			N/A
Average full-time equivalent employees		2,620			2,626			2,639			2,715			2,780			(.2	)		(5.8	)

TE = Taxable Equivalent
N/A = Not Applicable
N/M = Not Meaningful