KeyCorp 8K Reports Third Quarter 2006 Earnings | KEY 17 Oct 06

Exhibit 99.1


Analyst Contact:	Vernon L. Patterson	Media Contact:	William C. Murschel
	216.689.0520		216.689.0457

Investor Relations		Key Media
Information:	www.Key.com/ir	Newsroom:	www.Key.com/newsroom

FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER 2006 EARNINGS

•		Third quarter EPS of $0.76, up 13% from the year-ago quarter

•		Return on average equity of 15.88%, compared to 14.84% one year ago

•		Total revenue up from the third quarter of 2005

•		Nonperforming assets and net loan charge-offs down from the year-ago quarter

CLEVELAND, October 17, 2006 – KeyCorp today announced third quarter net income of $312 million, or $0.76 per diluted common share, compared to $278 million, or $0.67 per share, for the third quarter of 2005. For the second quarter of 2006, net income was $308 million, or $0.75 per diluted common share. Return on average equity was 15.88% for the third quarter of 2006, compared to 14.84% for the same period last year and 16.11% for the second quarter of 2006.

For the first nine months of 2006, net income was $909 million, or $2.21 per diluted common share, compared to $833 million, or $2.01 per share, for the first nine months of 2005. Return on average equity was 15.82%, compared to 15.36% for the same period last year.

“Key’s financial performance continued to improve in the third quarter, driven once again by revenue growth and solid asset quality trends,” said Chairman and Chief Executive Officer Henry L. Meyer III. “Key’s taxable-equivalent revenue rose by $37 million from the year-ago quarter due to solid commercial loan growth, an increase in core deposits and higher fee income. These improved results were achieved in a challenging interest rate environment and a highly competitive market for loans and deposits.

“With regard to asset quality, nonperforming assets decreased by $64 million from the third quarter of 2005. Net loan charge-offs were down $6 million and represented 0.25% of Key’s average total loans for the current quarter.

“During the third quarter, we reached an agreement to sell our McDonald Investments branch network to UBS Financial Services and separately announced our intention to pursue the sale of the Champion Mortgage finance business. These actions will improve Key’s business mix and support our focus on relationship businesses.”

The company expects earnings to be in the range of $0.72 to $0.76 per share for the fourth quarter of 2006.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 2

SUMMARY OF CONSOLIDATED RESULTS

Taxable-equivalent net interest income was $751 million for the third quarter of 2006, compared to $726 million for the year-ago quarter. The positive effect of a 5% increase in average earning assets, due primarily to a 7% rise in commercial loans, more than offset the effect of a 4 basis point decline in the net interest margin to 3.63%. Competitive pressure on loan and deposit pricing and the flat-to-inverted yield curve are expected to continue to put pressure on margins.

Compared to the second quarter of 2006, taxable-equivalent net interest income was essentially unchanged. The favorable effect of an increase in average earning assets was offset by the effect of a 6 basis point decline in the net interest margin.

Key’s noninterest income was $543 million for the third quarter of 2006, compared to $531 million for the year-ago quarter. The improvement reflected higher income from several of Key’s fee-based businesses, offset in part by reductions in income from dealer trading and derivatives, and other investments. In addition, Key recorded net losses from the sales of securities, compared to net gains in the same period one year ago.

Compared to the second quarter of 2006, noninterest income decreased by $4 million. Lower income from investment banking and capital markets activities was the primary cause of the decline. In addition, Key recorded net losses from the sales of securities in the third quarter of 2006, compared to net gains in the prior quarter. These results were moderated by increases in income from a number of other fee-based businesses.

Key’s noninterest expense was $808 million for the third quarter of 2006, compared to $781 million for the same period last year. Personnel expense rose by $8 million, due primarily to higher costs incurred in connection with business expansion. Nonpersonnel expense grew by $19 million, which included a $10 million contribution made to Key Foundation during the third quarter of 2006.

Compared to the second quarter of 2006, noninterest expense decreased by $8 million. The improvement was attributable to decreases in personnel expense, professional fees and miscellaneous expense, offset in part by higher costs associated with marketing and the contribution to Key Foundation.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 3

ASSET QUALITY

Key’s provision for loan losses was $31 million for the third quarter of 2006, compared to $43 million for the year-ago quarter and $24 million for the second quarter of 2006.

Net loan charge-offs for the quarter totaled $43 million, or 0.25% of average loans, compared to $49 million, or 0.30%, for the same period last year and $34 million, or 0.21%, for the previous quarter.

At September 30, 2006, Key’s nonperforming loans totaled $223 million and represented 0.34% of period-end portfolio loans, compared to 0.55% at September 30, 2005, and 0.41% at June 30, 2006. During the third quarter of 2006, Key moved approximately $55 million of loans from “nonperforming loans” to “nonperforming loans held for sale” in connection with its intention to pursue the sale of the Champion Mortgage finance business. This reclassification had no effect on Key’s total nonperforming assets. At September 30, 2006, nonperforming assets totaled $329 million and represented 0.50% of portfolio loans, other real estate owned and other nonperforming assets, compared to 0.60% at September 30, 2005, and 0.46% at June 30, 2006.

Key’s allowance for loan losses stood at $944 million, or 1.44% of loans outstanding, at September 30, 2006, compared to $1.093 billion, or 1.67%, at September 30, 2005, and $956 million, or 1.42%, at June 30, 2006. At September 30, 2006, the allowance for loan losses represented 423% of nonperforming loans, compared to 304% one year ago and 343% at June 30, 2006.

CAPITAL

Key’s capital ratios continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2006. Key’s tangible equity to tangible assets ratio was 6.81% at quarter end, compared to 6.68% at September 30, 2005, and June 30, 2006.

Key’s capital position provides it with the flexibility to take advantage of future investment opportunities, to repurchase shares when appropriate and to pay dividends. During the third quarter of 2006, Key repurchased 2,500,000 of its common shares. At September 30, 2006, there were 9,961,248 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	3Q06			2Q06			1Q06			4Q05			3Q05

Shares outstanding at beginning of period		402,672			405,273			406,624			408,542			408,231
Issuance of shares under employee benefit and dividend reinvestment plans		2,576			1,399			4,649			1,332			1,561
Repurchase of common shares		(2,500	)		(4,000	)		(6,000	)		(3,250	)		(1,250	)

Shares outstanding at end of period		402,748			402,672			405,273			406,624			408,542

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 4

LINE OF BUSINESS RESULTS

The following table shows 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 two pages of this release.

Major Business Groups


										Percent change 3Q06 vs.
dollars in millions	3Q06			2Q06			3Q05			2Q06			3Q05

Revenue (taxable equivalent)
Community Banking	$	671		$	663		$	659			1.2	%		1.8	%
National Banking		631			632			601			(.2	)		5.0
Other Segments		25			21			25			19.0			—

Total segments		1,327			1,316			1,285			.8			3.3

Reconciling Items		(33	)		(17	)		(28	)		(94.1	)		(17.9	)

Total	$	1,294		$	1,299		$	1,257			(.4	)%		2.9	%


Net income											`
Community Banking	$	112		$	104		$	111			7.7	%		.9	%
National Banking		176			177			161			(.6	)		9.3
Other Segments		20			19			21			5.3			(4.8	)

Total segments		308			300			293			2.7			5.1

Reconciling Items		4			8			(15	)		(50.0	)		N/M

Total	$	312		$	308		$	278			1.3	%		12.2	%


N/M = Not Meaningful

Community Banking


										Percent change 3Q06 vs.
dollars in millions	3Q06			2Q06			3Q05			2Q06			3Q05

Summary of operations
Net interest income (TE)	$	443		$	437		$	432			1.4	%		2.5	%
Noninterest income		228			226			227			.9			.4

Total revenue (TE)		671			663			659			1.2			1.8
Provision for loan losses		22			20			26			10.0			(15.4	)
Noninterest expense		470			476			455			(1.3	)		3.3

Income before income taxes (TE)		179			167			178			7.2			.6
Allocated income taxes and TE adjustments		67			63			67			6.3			—

Net income	$	112		$	104		$	111			7.7	%		.9	%


Percent of consolidated net income		36	%		34	%		40	%		N/A			N/A

Average balances
Loans and leases	$	26,737		$	26,804		$	27,131			(.2	)%		(1.5	)%
Total assets		29,718			29,805			30,026			(.3	)		(1.0	)
Deposits		46,987			46,683			44,705			.7			5.1


TE = Taxable Equivalent, N/A = Not Applicable

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 5

Additional Community Banking Data


										Percent change 3Q06 vs.
dollars in millions	3Q06			2Q06			3Q05			2Q06			3Q05

Average deposits outstanding
Noninterest-bearing	$	8,111		$	8,086		$	8,411			.3	%		(3.6	)%
Money market deposit accounts and other savings		22,390			22,523			21,448			(.6	)		4.4
Time		16,486			16,074			14,846			2.6			11.0

Total deposits	$	46,987		$	46,683		$	44,705			.7	%		5.1	%


Home equity loans
Average balance	$	10,048		$	10,107		$	10,365
Weighted-average loan-to-value ratio		70	%		70	%		71	%
Percent first lien positions		60			60			61

Other data
On-line households / household penetration		646,993 / 52	%		639,444 / 52	%		607,127 / 49	%
KeyCenters		949			946			946
Automated teller machines		2,099			2,120			2,185

Net income for Community Banking was $112 million for the third quarter of 2006, up slightly from $111 million for the year-ago quarter. Growth in net interest income and a decrease in the provision for loan losses drove the improvement and more than offset an increase in noninterest expense. Noninterest income was essentially unchanged.

Taxable-equivalent net interest income increased by $11 million, or 3%, from the third quarter of 2005, due to growth in average deposits, which also experienced a more favorable interest rate spread. The positive effects of these factors were moderated by a reduction in, and a tighter interest rate spread on, earning assets.

The provision for loan losses decreased by $4 million, or 15%, as a result of an improved credit risk profile.

Noninterest expense rose by $15 million, or 3%. Increases in personnel expense and various indirect charges caused the rise.

During the third quarter of 2006, Key entered into an agreement to sell the McDonald Investments branch network to UBS Financial Services Inc., a subsidiary of UBS AG. This network includes approximately 340 financial advisors in addition to the field support staff who work in 14 states throughout the Northeast, Midwest, Rocky Mountain and Northwest. The sale is expected to be completed in the first quarter of 2007.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 6

National Banking


										Percent change 3Q06 vs.
dollars in millions	3Q06			2Q06			3Q05			2Q06			3Q05

Summary of operations
Net interest income (TE)	$	375		$	373		$	348			.5	%		7.8	%
Noninterest income		256			259			253			(1.2	)		1.2

Total revenue (TE)		631			632			601			(.2	)		5.0
Provision for loan losses		9			4			17			125.0			(47.1	)
Noninterest expense		340			345			326			(1.4	)		4.3

Income before income taxes (TE)		282			283			258			(.4	)		9.3
Allocated income taxes and TE adjustments		106			106			97			—			9.3

Net income	$	176		$	177		$	161			(.6	)%		9.3	%


Percent of consolidated net income		57	%		57	%		58	%		N/A			N/A

Average balances
Loans and leases^a	$	38,767		$	40,201		$	37,072			(3.6	)%		4.6	%
Loans held for sale^a		6,192			3,835			3,511			61.5			76.4
Total assets		51,347			50,432			46,708			1.8			9.9
Deposits		11,068			10,638			7,785			4.0			42.2


(a)		On August 1, 2006, Key transferred $2.5 billion of home equity loans from the loan portfolio to loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business. This transfer reduced average home equity loans and leases and increased average loans held for sale by approximately $1.6 billion for the third quarter of 2006.

TE = Taxable Equivalent, N/A = Not Applicable

Net income for National Banking was $176 million for the third quarter of 2006, up from $161 million for the same period last year. The improvement was due primarily to higher net interest income and a decrease in the provision for loan losses, offset in part by a rise in the level of noninterest expense.

Taxable-equivalent net interest income grew by $27 million, or 8%, from the third quarter of 2005, reflecting strong growth in deposits, as well as average loans and leases. Deposits rose by $3.3 billion, or 42%, from the third quarter of 2005. Average loans and leases grew by $1.7 billion, or 5%, due largely to increases in the Real Estate Capital and Equipment Finance lines of business. The positive effects of these factors were moderated by tighter interest rate spreads on average earning assets in the Equipment Finance and Consumer Finance lines.

Noninterest income rose by $3 million, or 1%. Higher income from operating leases, trust and investment services, and a number of other fee-based services were moderated by reductions in income from dealer trading and derivatives, and other investments. In addition, Key recorded net losses from the sales of securities, compared to net gains in the same period one year ago.

The provision for loan losses decreased by $8 million, or 47%, as a result of an improved credit risk profile.

Noninterest expense increased by $14 million, or 4%, reflecting higher costs associated with operating leases and various indirect charges.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 7

In the current year, we have continued to take actions to improve our business mix and to support our focus on relationship businesses. During the third quarter, we announced our plans to pursue the sale of the Champion Mortgage finance business, and during the prior quarter, we expanded our asset management product line by acquiring Austin Capital Management, Ltd., an investment firm headquartered in Austin, Texas.

In addition, during the second half of 2005, we completed two acquisitions that have helped us to build upon our success in commercial mortgage origination and servicing. In the fourth quarter of 2005, we continued the expansion of our commercial mortgage servicing business by acquiring the commercial mortgage-backed servicing business of ORIX Capital Markets, LLC, headquartered in Dallas, Texas. In the third quarter, we expanded our FHA financing and servicing capabilities by acquiring Malone Mortgage Company, also based in Dallas.

Other Segments

Other segments consist of Corporate Treasury and Key’s Principal Investing unit. These segments generated net income of $20 million for the third quarter of 2006, compared to $21 million for the same period last year.

Line of Business Descriptions

Community Banking

Regional 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. This line of business also provides small businesses that typically have annual sales revenues of $5 million or less with deposit, investment and credit products, and business advisory services.

Regional Banking also 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.

Commercial Bankingprovides midsize businesses with products and services that include commercial lending, cash management, equipment leasing, investments and employee benefit programs, succession planning, capital markets, derivatives and foreign exchange.

National Banking

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 in which the owner occupies less than 60% of the premises).

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 Institutional and Capital Markets, and Commercial Banking) if those businesses are principally responsible for maintaining the relationship with the client.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 8

Institutional and Capital Marketsprovides products and services to large corporations, middle-market companies, financial institutions, government entities and not-for-profit organizations. These products and services include commercial lending, treasury management, investment banking, derivatives and foreign exchange, equity and debt underwriting and trading, and syndicated finance.

Through its Victory Capital Management unit, Institutional and Capital Markets also 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.

Consumer Financeincludes Indirect Lending, Commercial Floor Plan Lending and National Home Equity.

Indirect Lending offers loans to consumers through dealers. This business unit also provides federal and private education loans to students and their parents and processes payments on loans that private schools make to parents.

Commercial Floor Plan Lending finances inventory for automobile and marine dealers.

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 home improvement contractors to provide home equity and home improvement solutions.

Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $96 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 949 KeyCenters and offices; a network of 2,099 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com,^âthat provides account access and financial products 24 hours a day.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 9

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 Tuesday, October 17, 2006. A tape of the call will be available through October 24.

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, including statements about our financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to assumptions, risks and uncertainties. Although management believes that the expectations and forecasts reflected in these forward-looking statements are reasonable, actual results could differ materially due to a variety of factors including: (1) changes in interest rates; (2) changes in trade, monetary or fiscal policy; (3) changes in general economic conditions, or in the condition of the local economies or industries in which we have significant operations or assets, which could, among other things, materially impact credit quality trends and our ability to generate loans; (4) increased competitive pressure among financial services companies; (5) the inability to successfully execute strategic initiatives designed to grow revenues and/or manage expenses; (6) consummation of significant business combinations or divestitures; (7) operational or risk management failures due to technological or other factors; (8) heightened regulatory practices, requirements or expectations; (9) new legal obligations or liabilities or unfavorable resolution of litigation; (10) adverse capital markets conditions; (11) disruption in the economy and general business climate as a result of terrorist activities or military actions; and (12) changes in accounting or tax practices or requirements. Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. We do not assume any obligation to update these forward-looking statements. For further information regarding KeyCorp, please read KeyCorp’s reports that are filed with the Securities and Exchange Commission and are available at www.sec.gov.

###

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 10

Financial Highlights

(dollars in millions, except per share amounts)


	Three months ended
	9-30-06			6-30-06			9-30-05
Summary of operations
Net interest income (TE)	$	751		$	752		$	726
Noninterest income		543			547			531

Total revenue (TE)		1,294			1,299			1,257
Provision for loan losses		31			24			43
Noninterest expense		808			816			781
Net income		312			308			278

Per common share
Net income	$	.77		$	.76		$	.68
Net income — assuming dilution		.76			.75			.67
Cash dividends declared		.345			.345			.325
Book value at period end		19.73			19.21			18.41
Market price at period end		37.44			35.68			32.25

Performance ratios
Return on average total assets		1.30	%		1.32	%		1.22	%
Return on average equity		15.88			16.11			14.84
Net interest margin (TE)		3.63			3.69			3.67

Capital ratios at period end
Equity to assets		8.26	%		8.16	%		8.15	%
Tangible equity to tangible assets		6.81			6.68			6.68
Tier 1 risk-based capital^a		7.92			7.90			7.72
Total risk-based capital^a		11.98			12.08			11.83
Leverage^a		8.90			8.82			8.60

Asset quality
Net loan charge-offs	$	43		$	34		$	49
Net loan charge-offs to average loans		.25	%		.21	%		.30	%
Allowance for loan losses	$	944		$	956		$	1,093
Allowance for loan losses to period-end loans		1.44	%		1.42	%		1.67	%
Allowance for loan losses to nonperforming loans		423.32			342.65			303.61
Nonperforming loans at period end	$	223		$	279		$	360
Nonperforming assets at period end		329			308			393
Nonperforming loans to period-end portfolio loans		.34	%		.41	%		.55	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.50			.46			.60

Trust and brokerage assets
Assets under management	$	84,060		$	80,349		$	76,341
Nonmanaged and brokerage assets		55,221			57,682			57,313

Other data
Average full-time equivalent employees		20,264			19,931			19,456
KeyCenters		949			946			946

Taxable-equivalent adjustment	$	21		$	22		$	33

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 11

Financial Highlights (continued)

(dollars in millions, except per share amounts)


	Nine months ended
	9-30-06			9-30-05
Summary of operations
Net interest income (TE)	$	2,259		$	2,163
Noninterest income		1,571			1,517

Total revenue (TE)		3,830			3,680
Provision for loan losses		94			107
Noninterest expense		2,394			2,303
Net income		909			833

Per common share
Net income	$	2.24		$	2.04
Net income — assuming dilution		2.21			2.01
Cash dividends declared		1.035			.975

Performance ratios
Return on average total assets		1.29	%		1.23	%
Return on average equity		15.82			15.36
Net interest margin (TE)		3.69			3.68

Asset quality
Net loan charge-offs	$	116		$	151
Net loan charge-offs to average loans		.23	%		.32	%

Other data
Average full-time equivalent employees		19,974			19,508

Taxable-equivalent adjustment	$	71		$	91

(a) 9-30-06 ratio is estimated.
TE = Taxable Equivalent

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 12

Consolidated Balance Sheets

(dollars in millions)


	9-30-06			6-30-06			9-30-05
Assets
Loans	$	65,551		$	67,408		$	65,575
Loans held for sale		7,150			4,189			3,595
Investment securities		41			44			98
Securities available for sale		7,441			7,140			7,124
Short-term investments		1,582			1,577			2,394
Other investments		1,367			1,379			1,310

Total earning assets		83,132			81,737			80,096
Allowance for loan losses		(944	)		(956	)		(1,093	)
Cash and due from banks		2,957			2,814			2,660
Premises and equipment		567			557			593
Goodwill		1,372			1,372			1,344
Other intangible assets		127			132			109
Corporate-owned life insurance		2,754			2,732			2,658
Derivative assets		915			1,016			1,132
Accrued income and other assets		5,275			5,390			4,824

Total assets	$	96,155		$	94,794		$	92,323


Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	25,150		$	25,291		$	23,541
Savings deposits		1,672			1,751			1,922
Certificates of deposit ($100,000 or more)		5,734			5,224			4,783
Other time deposits		11,848			11,542			10,804

Total interest-bearing		44,404			43,808			41,050
Noninterest-bearing		13,396			13,268			12,202
Deposits in foreign office — interest-bearing		3,629			3,762			4,819

Total deposits		61,429			60,838			58,071
Federal funds purchased and securities sold under repurchase agreements		4,701			3,654			3,444
Bank notes and other short-term borrowings		2,594			2,360			3,001
Derivative liabilities		844			1,156			1,075
Accrued expense and other liabilities		4,986			4,999			5,173
Long-term debt		13,654			14,050			14,037

Total liabilities		88,208			87,057			84,801

Shareholders’ equity
Preferred stock		—			—			—
Common shares		492			492			492
Capital surplus		1,588			1,577			1,517
Retained earnings		8,371			8,199			7,719
Treasury stock, at cost		(2,434	)		(2,411	)		(2,133	)
Accumulated other comprehensive loss		(70	)		(120	)		(73	)

Total shareholders’ equity		7,947			7,737			7,522


Total liabilities and shareholders’ equity	$	96,155		$	94,794		$	92,323


Common shares outstanding (000)		402,748			402,672			408,542

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 13

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended							Nine months ended
	9-30-06			6-30-06		9-30-05		9-30-06			9-30-05
Interest income
Loans	$	1,196		$	1,190	$	1,006	$	3,500		$	2,837
Loans held for sale		131			73		56		272			190
Investment securities		1			1		1		2			3
Securities available for sale		84			84		84		251			244
Short-term investments		16			16		15		54			37
Other investments		16			17		12		58			44

Total interest income		1,444			1,381		1,174		4,137			3,355

Interest expense
Deposits		443			392		273		1,178			717
Federal funds purchased and securities sold under repurchase agreements		45			34		31		113			81
Bank notes and other short-term borrowings		24			27		22		75			58
Long-term debt		202			198		155		583			427

Total interest expense		714			651		481		1,949			1,283


Net interest income		730			730		693		2,188			2,072
Provision for loan losses		31			24		43		94			107

Net interest income after provision for loan losses		699			706		650		2,094			1,965

Noninterest income
Trust and investment services income		137			139		135		411			408
Service charges on deposit accounts		78			77		82		227			228
Investment banking and capital markets income		44			59		62		163			168
Operating lease income		58			56		47		166			141
Letter of credit and loan fees		48			45		46		133			133
Corporate-owned life insurance income		23			26		26		74			78
Electronic banking fees		27			27		24		78			70
Net gains from loan securitizations and sales		14			10		12		34			41
Net securities gains (losses)		(7	)		4		3		(2	)		(2	)
Other income		121			104		94		287			252

Total noninterest income		543			547		531		1,571			1,517

Noninterest expense
Personnel		422			431		414		1,258			1,190
Net occupancy		63			61		66		187			212
Computer processing		52			49		54		157			155
Operating lease expense		48			45		40		134			118
Professional fees		29			40		29		102			87
Marketing		37			28		29		83			88
Equipment		26			26		28		78			84
Other expense		131			136		121		395			369

Total noninterest expense		808			816		781		2,394			2,303


Income before income taxes and cumulative effect of accounting change		434			437		400		1,271			1,179
Income taxes		122			129		122		367			346

Income before cumulative effect of accounting change		312			308		278		904			833
Cumulative effect of change in accounting for forfeited stock-based awards, net of tax		—			—		—		5			—

Net income	$	312		$	308	$	278	$	909		$	833


Per common share:
Income before cumulative effect of accounting change	$	.77		$	.76	$	.68	$	2.23		$	2.04
Net income		.77			.76		.68		2.24			2.04

Per common share — assuming dilution:
Income before cumulative effect of accounting change	$	.76		$	.75	$	.67	$	2.20		$	2.01
Net income		.76			.75		.67		2.21			2.01

Cash dividends declared per common share	$	.345		$	.345	$	.325	$	1.035		$	.975

Weighted-average common shares outstanding (000)		403,780			404,528		410,456		405,218			409,166
Weighted-average common shares and potential common shares outstanding (000)		409,428			410,559		415,441		411,029			414,510

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 14

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


	Third Quarter 2006								Second Quarter 2006								Third Quarter 2005
	Average								Average								Average
	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans:^a,b
Commercial, financial and agricultural^c	$	21,648		$	400		7.34	%	$	21,970		$	390		7.12	%	$	19,249		$	280		5.78	%
Real estate — commercial mortgage		8,106			164		8.04			8,071			153		7.59			8,467			136		6.42
Real estate — construction		7,965			171		8.51			7,570			152		8.07			6,388			110		6.81
Commercial lease financing^c		9,850			144		5.83			9,764			148		6.05			10,161			158		6.19

Total commercial loans		47,569			879		7.34			47,375			843		7.13			44,265			684		6.15
Real estate — residential		1,415			23		6.49			1,430			24		6.54			1,472			23		6.13
Home equity^d		11,847			218		7.32			13,449			247		7.36			13,888			236		6.72
Consumer — direct		1,585			36		9.07			1,685			41		9.64			1,794			40		8.96
Consumer — indirect		3,594			61		6.83			3,503			57		6.66			3,339			56		6.67

Total consumer loans		18,441			338		7.31			20,067			369		7.37			20,493			355		6.86

Total loans		66,010			1,217		7.33			67,442			1,212		7.20			64,758			1,039		6.37
Loans held for sale^d		6,201			131		8.40			3,844			73		7.64			3,521			56		6.43
Investment securities^a		42			1		8.12			46			1		8.01			76			1		7.00
Securities available for sale^e		7,216			84		4.61			7,075			84		4.71			7,131			84		4.65
Short-term investments		1,588			16		3.78			1,678			16		3.89			1,972			15		3.15
Other investments^e		1,363			16		4.67			1,398			17		4.60			1,342			12		3.25

Total earning assets		82,420			1,465		7.06			81,483			1,403		6.89			78,800			1,207		6.08
Allowance for loan losses		(954	)							(963	)							(1,095	)
Accrued income and other assets		13,452								13,341								12,918

Total assets	$	94,918							$	93,861							$	90,623


Liabilities
NOW and money market deposit accounts	$	25,230			194		3.05		$	25,347			173		2.75		$	22,886			101		1.75
Savings deposits		1,700			1		.19			1,752			1		.20			1,952			2		.29
Certificates of deposit ($100,000 or more)^f		5,517			67		4.82			5,382			61		4.54			4,928			48		3.85
Other time deposits		11,700			127		4.29			11,456			115		4.02			10,805			87		3.21
Deposits in foreign office		4,139			54		5.22			3,429			42		4.88			4,048			35		3.46

Total interest-bearing deposits		48,286			443		3.64			47,366			392		3.32			44,619			273		2.43
Federal funds purchased and securities sold under repurchase agreements		3,634			45		4.88			3,005			34		4.60			3,674			31		3.28
Bank notes and other short-term borrowings		2,285			24		4.29			2,497			27		4.17			2,841			22		3.04
Long-term debt^f		13,763			202		5.83			14,088			198		5.59			13,814			155		4.50

Total interest-bearing liabilities		67,968			714		4.17			66,956			651		3.89			64,948			481		2.94

Noninterest-bearing deposits		13,085								13,027								12,215
Accrued expense and other liabilities		6,068								6,211								6,027

Total liabilities		87,121								86,194								83,190

Shareholders’ equity		7,797								7,667								7,433


Total liabilities and shareholders’ equity	$	94,918							$	93,861							$	90,623

Interest rate spread (TE)							2.89	%							3.00	%							3.14	%

Net interest income (TE) and net interest margin (TE)					751		3.63	%					752		3.69	%					726		3.67	%

TE adjustment^a					21								22								33

Net interest income, GAAP basis				$	730							$	730							$	693



(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)		During the first quarter of 2006, Key reclassified $760 million of average loans and related interest income from the commercial lease financing component of the commercial loan portfolio to the commercial, financial and agricultural component to more accurately reflect the nature of these receivables. Balances presented for prior periods were not reclassified as the historical data was not available.

(d)		On August 1, 2006, Key transferred $2.5 billion of home equity loans from the loan portfolio to loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business. This transfer reduced average home equity loans and increased average loans held for sale by approximately $1.6 billion for the third quarter of 2006.

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

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

TE = Taxable Equivalent

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 15

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


	Nine months ended September 30, 2006								Nine months ended September 30, 2005
	Average								Average
	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets

Loans:^a,b
Commercial, financial and agricultural^c	$	21,779		$	1,147		7.04	%	$	19,307		$	768		5.32	%
Real estate — commercial mortgage		8,089			461		7.62			8,344			380		6.09
Real estate — construction		7,618			461		8.10			6,050			289		6.38
Commercial lease financing^c		9,733			435		5.95			10,067			474		6.28

Total commercial loans		47,219			2,504		7.09			43,768			1,911		5.83
Real estate — residential		1,431			69		6.45			1,471			67		6.06
Home equity^d		12,904			704		7.29			13,926			674		6.47
Consumer — direct		1,666			118		9.46			1,850			114		8.25
Consumer — indirect		3,489			176		6.72			3,331			161		6.44

Total consumer loans		19,490			1,067		7.31			20,578			1,016		6.59

Total loans		66,709			3,571		7.15			64,346			2,927		6.08
Loans held for sale^d		4,588			272		7.93			3,654			190		6.96
Investment securities^a		50			2		7.38			70			4		8.00
Securities available for sale^e		7,147			251		4.64			7,146			244		4.54
Short-term investments		1,672			54		4.27			1,818			37		2.74
Other investments^e		1,365			58		5.45			1,406			44		4.00

Total earning assets		81,531			4,208		6.89			78,440			3,446		5.86
Allowance for loan losses		(960	)							(1,117	)
Accrued income and other assets		13,334								13,175

Total assets	$	93,905							$	90,498


Liabilities
NOW and money market deposit accounts	$	25,012			512		2.74		$	22,274			233		1.40
Savings deposits		1,754			3		.24			1,969			4		.26
Certificates of deposit ($100,000 or more)^f		5,436			186		4.57			4,941			138		3.74
Other time deposits		11,481			345		4.02			10,734			245		3.06
Deposits in foreign office		3,644			132		4.83			4,438			97		2.93

Total interest-bearing deposits		47,327			1,178		3.33			44,356			717		2.16
Federal funds purchased and securities sold under repurchase agreements		3,330			113		4.52			3,990			81		2.70
Bank notes and other short-term borrowings		2,443			75		4.11			2,860			58		2.71
Long-term debt^f		13,946			583		5.57			14,172			427		4.12

Total interest-bearing liabilities		67,046			1,949		3.88			65,378			1,283		2.64

Noninterest-bearing deposits		12,941								11,825
Accrued expense and other liabilities		6,238								6,042

Total liabilities		86,225								83,245

Shareholders’ equity		7,680								7,253


Total liabilities and shareholders’ equity	$	93,905							$	90,498

Interest rate spread (TE)							3.01	%							3.22	%

Net interest income (TE) and net interest margin (TE)					2,259		3.69	%					2,163		3.68	%

TE adjustment^a					71								91

Net interest income, GAAP basis				$	2,188							$	2,072



(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)		During the first quarter of 2006, Key reclassified $760 million of average loans and related interest income from the commercial lease financing component of the commercial loan portfolio to the commercial, financial and agricultural component to more accurately reflect the nature of these receivables. Balances presented for prior periods were not reclassified as the historical data was not available.

(d)		On August 1, 2006, Key transferred $2.5 billion of home equity loans from the loan portfolio to loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business. This transfer reduced average home equity loans and increased average loans held for sale by approximately $550 million for the first nine months of 2006.

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

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

TE = Taxable Equivalent

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 16

Noninterest Income
(in millions)


	Three months ended							Nine months ended
	9-30-06			6-30-06		9-30-05		9-30-06			9-30-05
Trust and investment services income^a	$	137		$	139	$	135	$	411		$	408
Service charges on deposit accounts		78			77		82		227			228
Investment banking and capital markets income^a		44			59		62		163			168
Operating lease income		58			56		47		166			141
Letter of credit and loan fees		48			45		46		133			133
Corporate-owned life insurance income		23			26		26		74			78
Electronic banking fees		27			27		24		78			70
Net gains from loan securitizations and sales		14			10		12		34			41
Net securities gains (losses)		(7	)		4		3		(2	)		(2	)
Other income:
Insurance income		18			17		15		49			37
Loan securitization servicing fees		5			5		5		15			15
Credit card fees		8			3		4		14			12
Net gains from principal investing		28			23		29		48			40
Miscellaneous income		62			56		41		161			148

Total other income		121			104		94		287			252

Total noninterest income	$	543		$	547	$	531	$	1,571		$	1,517



(a)		Additional detail provided in tables below.

Trust and Investment Services Income
(in millions)


	Three months ended						Nine months ended
	9-30-06		6-30-06		9-30-05		9-30-06		9-30-05
Brokerage commissions and fee income	$	56	$	59	$	61	$	177	$	186
Personal asset management and custody fees		39		38		39		116		115
Institutional asset management and custody fees		42		42		35		118		107

Total trust and investment services income	$	137	$	139	$	135	$	411	$	408

Investment Banking and Capital Markets Income
(in millions)


	Three months ended						Nine months ended
	9-30-06		6-30-06		9-30-05		9-30-06		9-30-05
Investment banking income	$	21	$	26	$	21	$	69	$	57
Dealer trading and derivatives income		7		11		16		25		45
Income from other investments		5		11		14		37		37
Foreign exchange income		11		11		11		32		29

Total investment banking and capital markets income	$	44	$	59	$	62	$	163	$	168

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 17

Noninterest Expense
(dollars in millions)


	Three months ended						Nine months ended
	9-30-06		6-30-06		9-30-05		9-30-06		9-30-05
Personnel^a	$	422	$	431	$	414	$	1,258	$	1,190
Net occupancy		63		61		66		187		212	^b
Computer processing		52		49		54		157		155
Operating lease expense		48		45		40		134		118
Professional fees		29		40		29		102		87
Marketing		37		28		29		83		88
Equipment		26		26		28		78		84
Other expense:
Postage and delivery		13		12		12		38		37
Franchise and business taxes		9		10		8		29		25
Telecommunications		7		7		8		21		23
OREO expense, net		2		1		2		4		6
Provision (credit) for losses on lending- related commitments		—		—		2		—		(7	)
Miscellaneous expense		100		106		89		303		285

Total other expense		131		136		121		395		369

Total noninterest expense	$	808	$	816	$	781	$	2,394	$	2,303


Average full-time equivalent employees		20,264		19,931		19,456		19,974		19,508



(a)		Additional detail provided in table below.

(b)		Includes a charge of $30 million recorded during the first quarter of 2005 to adjust the accounting for rental expense associated with operating leases from an escalating to a straight-line basis.

Personnel Expense
(in millions)


	Three months ended						Nine months ended
	9-30-06		6-30-06		9-30-05		9-30-06		9-30-05
Salaries	$	241	$	235	$	222	$	706	$	657
Incentive compensation		95		100		99		274		262
Employee benefits		68		76		66		226		204
Stock-based compensation		15		18		23		47		55
Severance		3		2		4		5		12

Total personnel expense	$	422	$	431	$	414	$	1,258	$	1,190

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 18

Loan Composition
(dollars in millions)


							Percent change 9-30-06 vs.
	9-30-06		6-30-06		9-30-05		6-30-06			9-30-05
Commercial, financial and agricultural^a	$	21,556	$	21,598	$	19,451		(.2)	%		10.8	%
Commercial real estate:
Commercial mortgage		8,266		7,994		8,618		3.4			(4.1	)
Construction		8,272		7,767		6,700		6.5			23.5

Total commercial real estate loans		16,538		15,761		15,318		4.9			8.0
Commercial lease financing^a		9,860		9,909		10,339		(.5	)		(4.6	)

Total commercial loans		47,954		47,268		45,108		1.5			6.3
Real estate — residential mortgage		1,407		1,418		1,476		(.8	)		(4.7	)
Home equity^b		10,988		13,509		13,872		(18.7	)		(20.8	)
Consumer — direct		1,576		1,670		1,792		(5.6	)		(12.1	)
Consumer — indirect:
Marine		2,982		2,920		2,676		2.1			11.4
Other		644		623		651		3.4			(1.1	)

Total consumer — indirect loans		3,626		3,543		3,327		2.3			9.0

Total consumer loans		17,597		20,140		20,467		(12.6	)		(14.0	)

Total loans	$	65,551	$	67,408	$	65,575		(2.8)	%		—

Loans Held for Sale Composition

(dollars in millions)


							Percent change 9-30-06 vs.
	9-30-06		6-30-06		9-30-05		6-30-06			9-30-05
Commercial, financial and agricultural	$	219	$	45		—		386.7	%		N/M
Real estate — commercial mortgage		1,062		1,133	$	416		(6.3	)		155.3	%
Real estate — construction		198		36		5		450.0			N/M
Commercial lease financing		2		—		—		N/M			N/M
Real estate — residential mortgage		21		27		21		(22.2	)		—
Home equity^b		2,485		1		1		N/M			N/M
Education		3,147		2,929		3,123		7.4			.8
Automobile		16		18		29		(11.1	)		(44.8	)

Total loans held for sale	$	7,150	$	4,189	$	3,595		70.7	%		98.9	%

N/M = Not Meaningful

(a)		On March 31, 2006, Key reclassified $792 million of loans from the commercial lease financing component of the commercial loan portfolio to the commercial, financial and agricultural component to more accurately reflect the nature of these receivables. Balances presented for prior periods were not reclassified as the historical data was not available.

(b)		On August 1, 2006, Key transferred $2.5 billion of home equity loans from the loan portfolio to loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 19

Summary of Loan Loss Experience

(dollars in millions)


	Three months ended									Nine months ended
	9-30-06			6-30-06			9-30-05			9-30-06			9-30-05
Average loans outstanding during the period	$	66,010		$	67,442		$	64,758		$	66,709		$	64,346


Allowance for loan losses at beginning of period	$	956		$	966		$	1,100		$	966		$	1,138
Loans charged off:
Commercial, financial and agricultural		30			20			14			74			58

Real estate— commercial mortgage		3			3			4			9			16
Real estate— construction		1			—			—			3			5

Total commercial real estate loans		4			3			4			12			21
Commercial lease financing		13			8			18			27			43

Total commercial loans		47			31			36			113			122
Real estate— residential mortgage		2			2			1			5			5
Home equity		6			8			7			22			20
Consumer— direct		7			9			10			26			28
Consumer— indirect		8			9			15			28			47

Total consumer loans		23			28			33			81			100

		70			59			69			194			222

Recoveries:
Commercial, financial and agricultural		8			7			4			27			14

Real estate— commercial mortgage		2			—			1			3			2
Real estate— construction		1			—			—			1			2

Total commercial real estate loans		3			—			1			4			4
Commercial lease financing		9			9			7			23			27

Total commercial loans		20			16			12			54			45
Real estate— residential mortgage		—			1			—			1			1
Home equity		2			1			1			5			4
Consumer— direct		1			2			2			5			6
Consumer— indirect		4			5			5			13			15

Total consumer loans		7			9			8			24			26

		27			25			20			78			71

Net loans charged off		(43	)		(34	)		(49	)		(116	)		(151	)
Provision for loan losses		31			24			43			94			107
Foreign currency translation adjustment		—			—			(1	)		—			(1	)

Allowance for loan losses at end of period	$	944		$	956		$	1,093		$	944		$	1,093


Net loan charge-offs to average loans		.25	%		.21	%		.30	%		.23	%		.32	%
Allowance for loan losses to period-end loans		1.44			1.42			1.67			1.44			1.67
Allowance for loan losses to nonperforming loans		423.32			342.65			303.61			423.32			303.61

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 20

Changes in Allowance for Credit Losses on Lending-Related Commitments

(in millions)


	Three months ended						Nine months ended
	9-30-06		6-30-06		9-30-05		9-30-06		9-30-05
Balance at beginning of period	$	59	$	59	$	57	$	59	$	66
Provision (credit) for losses on lending-related commitments		—		—		2		—		(7	)

Balance at end of period^a	$	59	$	59	$	59	$	59	$	59

Summary of Nonperforming Assets and Past Due Loans

(dollars in millions)


	9-30-06			6-30-06			3-31-06			12-31-05			9-30-05
Commercial, financial and agricultural	$	42		$	76		$	68		$	63		$	50

Real estate — commercial mortgage		41			40			42			43			33
Real estate — construction		37			4			4			2			3

Total commercial real estate loans		78			44			46			45			36
Commercial lease financing		20			29			29			39			151

Total commercial loans		140			149			143			147			237
Real estate — residential mortgage		29			31			43			41			40
Home equity^b		46			90			97			79			75
Consumer — direct		2			3			6			2			3
Consumer — indirect		6			6			6			8			5

Total consumer loans		83			130			152			130			123

Total nonperforming loans		223			279			295			277			360

Nonperforming loans held for sale^b		56			1			2			3			2

OREO		52			26			21			25			29
Allowance for OREO losses		(3	)		(1	)		(1	)		(2	)		(3	)

OREO, net of allowance		49			25			20			23			26

Other nonperforming assets		1			3			3			4			5

Total nonperforming assets	$	329		$	308		$	320		$	307		$	393


Accruing loans past due 90 days or more	$	125		$	119		$	107		$	90		$	94
Accruing loans past due 30 through 89 days		715			600			498			491			550
Nonperforming loans to period-end portfolio loans		.34	%		.41	%		.44	%		.42	%		.55	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.50			.46			.48			.46			.60

Summary of Changes in Nonperforming Loans

(in millions)


	3Q06			2Q06			1Q06			4Q05
Balance at beginning of period	$	279		$	295		$	277		$	360
Loans placed on nonaccrual status		134			98			100			142
Charge-offs		(70	)		(59	)		(65	)		(187	)
Loans sold		(22	)		(6	)		(2	)		(2	)
Payments		(43	)		(45	)		(15	)		(27	)
Transfer to held-for-sale portfolio^b		(55	)		—			—			—
Transfers to OREO		—			(4	)		—			—
Loans returned to accrual status		—			—			—			(9	)

Balance at end of period	$	223		$	279		$	295		$	277

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

(b)		On August 1, 2006, Key transferred approximately $55 million of home equity loans from nonperforming loans to nonperforming loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business.

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 21

Line of Business Results

(dollars in millions)

Community Banking


																Percent change 3Q06 vs.
	3Q06			2Q06			1Q06			4Q05			3Q05			2Q06			3Q05
Summary of operations
Total revenue (TE)	$	671		$	663		$	643		$	666		$	659			1.2	%		1.8	%
Provision for loan losses		22			20			29			30			26			10.0			(15.4	)
Noninterest expense		470			476			439			484			455			(1.3	)		3.3
Net income		112			104			109			95			111			7.7			.9
Average loans and leases		26,737			26,804			26,739			27,267			27,131			(.2	)		(1.5	)
Average deposits		46,987			46,683			45,835			45,730			44,705			.7			5.1
Net loan charge-offs		22			24			28			31			25			(8.3	)		(12.0	)
Return on average allocated equity		19.20	%		18.11	%		19.14	%		16.18	%		19.10	%		N/A			N/A
Average full-time equivalent employees		9,080			8,970			8,829			8,701			8,743			1.2			3.9

Supplementary information (lines of business)
Regional Banking
Total revenue (TE)	$	570		$	564		$	547		$	558		$	556			1.1	%		2.5	%
Provision for loan losses		27			16			30			24			19			68.8			42.1
Noninterest expense		420			424			392			429			406			(.9	)		3.4
Net income		77			77			78			66			82			—			(6.1	)
Average loans and leases		18,722			18,771			18,776			19,010			19,093			(.3	)		(1.9	)
Average deposits		43,405			43,091			42,222			41,929			41,126			.7			5.5
Net loan charge-offs		19			21			22			26			23			(9.5	)		(17.4	)
Return on average allocated equity		19.15	%		19.56	%		19.92	%		16.36	%		20.55	%		N/A			N/A
Average full-time equivalent employees		8,761			8,642			8,519			8,387			8,420			1.4			4.0

Commercial Banking
Total revenue (TE)	$	101		$	99		$	96		$	108		$	103			2.0	%		(1.9)	%
Provision for loan losses		(5	)		4			(1	)		6			7			N/M			N/M
Noninterest expense		50			52			47			55			49			(3.8	)		2.0
Net income		35			27			31			29			29			29.6			20.7
Average loans and leases		8,015			8,033			7,963			8,257			8,038			(.2	)		(.3	)
Average deposits		3,582			3,592			3,613			3,801			3,579			(.3	)		.1
Net loan charge-offs		3			3	��		6			5			2			—			50.0
Return on average allocated equity		19.31	%		14.94	%		17.44	%		15.80	%		15.91	%		N/A			N/A
Average full-time equivalent employees		319			328			310			314			323			(2.7	)		(1.2	)

KeyCorp Reports Third Quarter 2006 Earnings
October 17, 2006
Page 22

Line of Business Results (continued)

(dollars in millions)

National Banking


																Percent change 3Q06 vs.
	3Q06			2Q06			1Q06			4Q05			3Q05			2Q06			3Q05
Summary of operations
Total revenue (TE)	$	631		$	632		$	625		$	644		$	601			(.2)	%		5.0	%
Provision for loan losses		9			4			10			6			17			125.0			(47.1	)
Noninterest expense		340			345			334			356			326			(1.4	)		4.3
Net income		176			177			176			176			161			(.6	)		9.3
Average loans and leases^a		38,767			40,201			39,534			38,398			37,072			(3.6	)		4.6
Average loans held for sale^a		6,192			3,835			3,689			3,585			3,511			61.5			76.4
Average deposits		11,068			10,638			9,962			8,580			7,785			4.0			42.2
Net loan charge-offs		21			10			11			133			24			110.0			(12.5	)
Return on average allocated equity		17.52	%		18.09	%		18.18	%		18.13	%		17.10	%		N/A			N/A
Average full-time equivalent employees		4,573			4,466			4,455			4,402			4,418			2.4			3.5

Supplementary information (lines of business)
Real Estate Capital
Total revenue (TE)	$	169		$	174		$	154		$	163		$	148			(2.9)	%		14.2	%
Provision for loan losses		14			9			4			8			4			55.6			250.0
Noninterest expense		70			72			66			68			64			(2.8	)		9.4
Net income		53			58			53			54			50			(8.6	)		6.0
Average loans and leases		12,854			12,719			12,467			12,038			11,265			1.1			14.1
Average loans held for sale		1,022			692			577			605			603			47.7			69.5
Average deposits		3,598			3,467			3,214			2,467			2,100			3.8			71.3
Net loan charge-offs		—			2			2			—			—			(100.0	)		—
Return on average allocated equity		18.64	%		20.81	%		19.52	%		20.38	%		19.60	%		N/A			N/A
Average full-time equivalent employees		970			954			981			873			812			1.7			19.5

Equipment Finance
Total revenue (TE)	$	137		$	135		$	124		$	128		$	122			1.5	%		12.3	%
Provision for loan losses		4			11			10			(8	)		5			(63.6	)		(20.0	)
Noninterest expense		82			79			77			80			72			3.8			13.9
Net income		32			29			23			35			28			10.3			14.3
Average loans and leases		10,108			9,871			9,569			9,458			9,133			2.4			10.7
Average loans held for sale		6			34			8			—			—			(82.4	)		N/M
Average deposits		19			14			15			15			14			35.7			35.7
Net loan charge-offs		12			3			3			132			11			300.0			9.1
Return on average allocated equity		14.73	%		13.90	%		11.25	%		17.25	%		14.32	%		N/A			N/A
Average full-time equivalent employees		927			915			935			971			966			1.3			(4.0	)

Institutional and Capital Markets
Total revenue (TE)	$	188		$	189		$	205		$	189		$	180			(.5)	%		4.4	%
Provision for loan losses		(3	)		(26	)		(4	)		4			(5	)		88.5			40.0
Noninterest expense		110			112			110			111			109			(1.8	)		.9
Net income		50			63			62			46			48			(20.6	)		4.2
Average loans and leases		7,377			7,589			7,823			7,358			7,316			(2.8	)		.8
Average loans held for sale		455			139			112			73			—			227.3			N/M
Average deposits		6,704			6,441			6,030			5,434			4,986			4.1			34.5
Net loan charge-offs (recoveries)		(1	)		(1	)		(4	)		(4	)		—			—			N/M
Return on average allocated equity		18.10	%		23.66	%		23.00	%		16.98	%		18.03	%		N/A			N/A
Average full-time equivalent employees		1,305			1,254			1,234			1,223			1,255			4.1			4.0

Consumer Finance
Total revenue (TE)	$	137		$	134		$	142		$	164		$	151			2.2	%		(9.3)	%
Provision for loan losses		(6	)		10			—			2			13			N/M			N/M
Noninterest expense		78			82			81			97			81			(4.9	)		(3.7	)
Net income		41			27			38			41			35			51.9			17.1
Average loans and leases^a		8,428			10,022			9,675			9,544			9,358			(15.9	)		(9.9	)
Average loans held for sale^a		4,709			2,970			2,992			2,907			2,908			58.6			61.9
Average deposits		747			716			703			664			685			4.3			9.1
Net loan charge-offs		10			6			10			5			13			66.7			(23.1	)
Return on average allocated equity		18.09	%		12.02	%		17.07	%		17.68	%		15.58	%		N/A			N/A
Average full-time equivalent employees		1,371			1,343			1,305			1,335			1,385			2.1			(1.0	)

(a)

On August 1, 2006, Key transferred $2.5 billion of home equity loans from the loan portfolio to loans held for sale in connection with its intention to pursue the sale of the Champion Mortgage finance business. This transfer reduced average home equity loans and increased average loans held for sale by approximately $1.6 billion for the third quarter of 2006.

TE = Taxable Equivalent

N/A = Not Applicable

N/M = Not Meaningful

KeyCorp (KEY) 8-KKeycorp Reports Third Quarter 2006 Earnings