KeyCorp Raises Dividend 10%, Gets Green Light from Fed on Buyback Plan
KeyCorp (NYSE:KEY), which agreed to buy a portion of Bank of America’s (NYSE:BAC) $110 billion commercial mortgage servicing rights last week, raised its quarterly dividend on Thursday by 10%.
The Cleveland-based provider of mortgage financing lifted its quarterly cash dividend to 5.5 cents a share, payable on June 14 to shareholders of record on May 28.
"The action … is yet another example of how we are meeting our commitment to deliver shareholder value," KeyCorp CEO Beth Mooney said in a statement.
The company, which also purchased last week virtually all of the third-party CMBS and special servicing rights from BofA’s global mortgage and securities products business, said Thursday it received no objection to its request for an additional capital distribution, which included a share buyback program of up to $426 million.
KeyCorp is looking to issue share buybacks using after-tax proceeds realized on the pending sale of Victory Capital Management and Victory Capital Advisors, which is expected to close in the third quarter pending regulatory and shareholder approvals.
In February, the company agreed to sell Victory for $246 million. It currently estimates that the portion of the after-tax net gain will be about $120 million to $125 million.