8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 21, 2008

(Exact name of registrant as specified in charter)

Ohio	1-11302	34-6542451
(State or other jurisdiction of incorporation)	Commission File Number	(I.R.S. Employer Identification No.)
127 Public Square, Cleveland, Ohio		44114-1306
(Address of principal executive offices)		(Zip Code)

(216) 689-6300

Registrant’s telephone number, including area code:

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02 Results of Operations and Financial Condition.
	Item 9.01 Financial Statements and Exhibits
SIGNATURE
EX-99.1
EX-99.2
EX-99.3

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

     On October 21, 2008, KeyCorp issued a press release announcing its earnings results for the three- and nine-month periods ended September 30, 2008 (the “Press Release”). This Press Release is attached as Exhibit 99.1 to this report and incorporated by reference herein. KeyCorp also held a conference call/webcast on October 21, 2008, to discuss its results. The slide presentation reviewed by KeyCorp in the conference call/webcast (the “Conference Call/Webcast Slide Presentation”) is attached as Exhibit 99.2 to this report and incorporated by reference herein.

     The information in the preceding paragraph, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).

     KeyCorp’s Consolidated Balance Sheets and Consolidated Statements of Income (the “Financial Statements”) included as part of the Press Release, are attached as Exhibit 99.3 to this report and are incorporated by reference herein. Exhibit 99.3 is “filed” for purposes of Section 18 of the Exchange Act and, therefore, may be incorporated by reference in filings under the Securities Act.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits
99.1	KeyCorp’s Press Release, dated October 21, 2008 (solely “furnished” and not filed for purposes of Item 2.02).
99.2	KeyCorp’s Conference Call/Webcast Slide Presentation (solely “furnished” and not filed for purposes of Item 2.02).
99.3	KeyCorp’s Financial Statements (“filed” for purposes of Item 2.02).

* * *

     Forward-Looking Statements. This filing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key’s control. Key’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.

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) continued disruption in the fixed income markets; (4) adverse capital markets conditions; (5) 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; (6) continued disruption in the housing markets and related conditions in the financial markets; (7) increased competitive pressure among financial services companies due to the recent consolidation of competing financial institutions and the conversion of certain investment banks to bank holding companies; (8) heightened legal standards and regulatory practices, requirements or expectations;(9) the inability to

successfully execute strategic initiatives designed to grow revenues and/or manage expenses; (10) increased FDIC deposit premiums; (11) consummation of significant business combinations or divestitures; (12) operational or risk management failures due to technological or other factors; (13) changes in accounting or tax practices or requirements; (14) new legal obligations or liabilities or unfavorable resolution of litigation; and (15) disruption in the economy and general business climate as a result of terrorist activities or military actions. For additional information on the factors that could cause Key’s actual results or financial condition to differ materially from those described in the forward-looking statements consult Key’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, and June 30, 2008, Annual Report on Form 10-K for the year ended December 31, 2007, and Current Reports on Form 8-K, filed with the Securities and Exchange Commission and available on the Securities and Exchange Commission’s website (www.sec.gov). 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.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KEYCORP
	(Registrant)
Date: October 21, 2008	/s/	Robert L. Morris
	By:	Robert L. Morris
			Executive Vice President
			and Chief Accounting Officer

EX-99.1

Exhibit 99.1

CONTACTS:	ANALYSTS	MEDIA
	Vernon L. Patterson	William C. Murschel
	216.689.0520	216.828.7416
	Vernon_Patterson@KeyBank.com	William_C_Murschel@KeyBank.com
	Christopher F. Sikora
	216.689.3133
	Chris_F_Sikora@KeyBank.com
INVESTOR		KEY MEDIA
RELATIONS:	www.key.com/ir	NEWSROOM: www.key.com/newsroom
FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER 2008 RESULTS

¨ Net loss of $36 million ($0.10 per common share) for the third quarter

¨ Loan loss reserve increased $133 million to $1.554 billion, or 2.03% of total loans

¨ Capital ratios remain strong; costs well controlled

¨ Actions taken to exit certain businesses

¨ Community Banking revenue and deposits up

¨ Opted-in to IRS global tax settlement; after-tax recovery of up to $100 million anticipated

     CLEVELAND, October 21, 2008 — KeyCorp (NYSE: KEY) today announced a third quarter loss from continuing operations of $36 million, or $0.10 per common share, compared to income from continuing operations of $224 million, or $0.57 per diluted common share, for the third quarter of 2007.

     The continuation of a difficult economic environment and a resulting increase in Key’s loan loss reserves contributed to the loss recorded for the current quarter. The Company’s third quarter results reflect a $133 million increase in reserves to $1.554 billion, or 2.03% of total loans. Additionally, third quarter results were adversely impacted by $33 million of after-tax losses on derivative contracts that resulted from market disruption caused by the failure of Lehman Brothers.

     “We have experienced the most severe financial crisis any of us has known in our business lifetime,” said Chief Executive Officer Henry L. Meyer, III. “However, in my 35 years in the banking industry, we have successfully managed through a number of troublesome credit cycles, each of which seemed daunting at the time. As I reflect back on those past cycles, I cannot recall a time when we were more prepared than today. Key has strong capital ratios (8.48% Tier 1 capital) and a strong loan loss reserve (2.03% of total loans; 161% coverage of nonperforming loans). In the third quarter, the increase in nonperforming assets slowed — up only 2.4%. Key does not have a subprime mortgage portfolio, credit card portfolio, or consumer automobile loan portfolio — the epicenters of consumer

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 2

credit issues. Also, in both the second and third quarters we were aggressive in reducing our exposure to the homebuilder segment of our commercial real estate business. As of the end of the third quarter, our total residential property exposure in commercial real estate, including loans held for sale, has been reduced by $1.3 billion, or 34%, from one year ago, with the majority of this reduction coming from the weakest, or most susceptible, portion of the portfolio.

     “Additionally, we have elected to reduce uncertainty surrounding our previously disclosed leveraged lease tax issue with the IRS. While we continue to believe that our initial tax position was correct, it would have taken years of effort and expense to resolve this matter through litigation. Consequently, Key has opted-in to the IRS’ global settlement initiative, which is essentially an offer by the federal tax authorities to resolve all such disputed cases. We expect that the definitive settlement documents will be executed as soon as the fourth quarter and that Key should realize an after-tax recovery of between $75 million and $100 million for previously accrued interest on disputed tax balances.”

     Key continued to take decisive steps in the third quarter to exit low-return, indirect businesses so that the company can focus its capital and resources on its best relationship customers. Key is in the process of exiting direct and indirect retail and floor-plan lending for marine and recreational vehicle products and will limit new student loans to those backed by government guarantee. These actions are the result of a series of decisions made over several years that have seen the Company exit subprime mortgage and automobile financing, broker-originated home equity lending as well as dispose of a segment of its residential homebuilder portfolio.

     “With respect to our relationship businesses, our Community Banking group continues to perform solidly, with higher revenue and deposit growth across our branch network. Despite the market turmoil, we are building a relationship-based, customer-focused business model which will serve us well as the economy ultimately recovers,” Meyer concluded.

     As shown in the following table, the comparability of Key’s earnings for the current, prior and year-ago quarters is affected by several significant items.

Significant Items Affecting the Comparability of Earnings

	Third Quarter 2008									Second Quarter 2008									Third Quarter 2007
	Pre-tax			After-tax			Impact			Pre-tax			After-tax			Impact			Pre-tax			After-tax			Impact
in millions, except per share amounts	Amount			Amount			on EPS			Amount			Amount			on EPS			Amount			Amount			on EPS
Provision for loan losses in excess of net charge-offs	$	(134	)	$	(83	)	$	(.17	)	$	(123	)	$	(77	)	$	(.18	)	$	(10	)	$	(6	)	$	(.02	)
Realized and unrealized (losses) gains on loan and securities portfolios held for sale or trading		(94	) a		(59	) a		(.12	)		62			39			.09			(77	)		(49	)		(.12	)
Net (losses) gains from principal investing		(24	)		(15	)		(.03	)		(14	)		(8	)		(.02	)		9			6			.01
Severance and other exit costs		(19	)		(14	)		(.03	)		(8	)		(5	)		(.01	)		(4	)		(3	)		(.01	)
Reversal of litigation reserve		23			14			.03			—			—			—			—			—			—
Charges related to leveraged lease tax litigation		—			(30	)		(.06	)		(359	)		(1,011	)		(2.43	)		—			—			—
Gain related to MasterCard Incorporated shares		—			—			—			—			—			—			27			17			.04

(a) Includes $54 million ($33 million after tax) of derivative-related charges recorded as a result of market disruption caused by the failure of Lehman Brothers and $31 million ($19 million after tax) of realized and unrealized losses from the residential properties segment of the construction loan portfolio.

EPS = Earnings per diluted common share

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 3

SUMMARY OF CONTINUING OPERATIONS

     Key’s taxable-equivalent net interest income was $705 million for the third quarter of 2008, compared to $712 million for the year-ago quarter. Average earning assets rose by $6.6 billion, or 8%, due primarily to growth in commercial loans and the January 1 acquisition of U.S.B. Holding Co., Inc., which added approximately $1.5 billion to Key’s loan portfolio. The net interest margin for the current quarter declined to 3.13% from 3.40% for the third quarter of 2007. Approximately 13 basis points of the reduction was attributable to the prospective decrease in net interest income caused by the second quarter 2008 recalculation of income previously recognized on all leveraged leases being contested by the Internal Revenue Service (“IRS”). Also contributing to the lower net interest margin were tighter loan and deposit spreads caused by competitive pricing, and a higher level of nonperforming assets.

     Compared to the second quarter of 2008, taxable-equivalent net interest income decreased by $33 million and the net interest margin declined by 19 basis points, using adjusted second quarter results, which exclude the effects of the charges recorded in connection with the tax litigation pertaining to Key’s leveraged lease financing portfolio. As previously reported, Key’s taxable-equivalent net interest income for the second quarter of 2008 was reduced significantly as a result of an adverse federal court decision on the company’s tax treatment of a Service Contract Lease transaction entered into by AWG Leasing Trust, in which Key is a partner. In accordance with the applicable accounting guidance, Key recalculated the lease income recognized from inception for all of the leveraged leases being contested by the IRS, not just the single leveraged lease subject to the Court decision. Key’s second quarter results also reflect a $475 million charge to income taxes for the interest cost associated with the contested tax liabilities. These actions reduced Key’s taxable-equivalent net interest income and net interest margin for the second quarter of 2008 by $838 million and 376 basis points, respectively, and reduced Key’s earnings by $1.011 billion, or $2.43 per common share.

     On August 6, 2008, the IRS announced an initiative for the settlement of all transactions, including the contested leveraged leases entered into by Key, which the IRS has characterized as LILO/SILO transactions (the “LILO/SILO Settlement Initiative”). As preconditions to its participation, Key was required to provide written acceptance to the IRS of the terms of the LILO/SILO Settlement Initiative and to dismiss its appeal of the AWG Leasing Trust litigation. Key has complied with these preconditions and was accepted into the LILO/SILO Settlement Initiative by the IRS on October 6, 2008. However, Key’s acceptance into this initiative is not binding until a closing agreement is executed by both Key and the IRS. Management believes that, upon the execution of a closing agreement, Key should realize an after-tax recovery of between $75 million and $100 million for previously accrued interest on disputed tax balances.

     Key’s noninterest income was $388 million for the third quarter of 2008, compared to $438 million for the year-ago quarter. Noninterest income for the current quarter includes $54 million of derivative-related charges recorded as a result of market disruption caused by the failure of Lehman Brothers and $31 million of realized and unrealized losses from the residential properties segment of the construction loan portfolio, while results for the third quarter of 2007 benefited from a $27 million gain from the sale of MasterCard Incorporated shares. Excluding these items, noninterest income was up $62 million. The improvement reflected a $14 million increase in income from trust and investment services, a $6 million increase in deposit service charges and a $15 million decrease in losses attributable to changes in the fair values of certain real estate related investments held by the Private Equity unit within the Real Estate Capital and Corporate Banking Services line of business. Excluding the loan-related losses mentioned above, Key had net gains of $1 million from loan sales and write-downs in the current quarter, compared to net losses of $53 million for the same period last

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 4

year. These favorable results were offset in part by net losses of $24 million from principal investing in the third quarter of 2008, compared to net gains of $9 million for the year-ago quarter.

     The major components of Key’s fee-based income for the past five quarters are shown in the following table.

Fee-Based Income — Major Components

in millions	3Q08			2Q08		1Q08		4Q07		3Q07
Trust and investment services income	$	133		$	138	$	129	$	131	$	119
Service charges on deposit accounts		94			93		88		90		88
Investment banking and capital markets (loss) income		(31	)		80		8		12		9
Operating lease income		69			68		69		72		70
Letter of credit and loan fees		53			51		37		58		51
Corporate-owned life insurance income		28			28		28		37		27
Electronic banking fees		27			27		24		25		25

     Compared to the second quarter of 2008, noninterest income decreased by $167 million, reflecting the continued effects of adverse conditions in the financial markets. Results from investment banking and capital markets activities decreased by $111 million, due primarily to an $85 million reduction from dealer trading and derivatives activities, including the third quarter charges resulting from market disruption caused by the failure of Lehman Brothers. Additionally, Key recorded $30 million in net losses from loan sales and write-downs, related primarily to commercial real estate loans held for sale, compared to net gains of $33 million for the prior quarter. Net losses from principal investing increased by $10 million from the second quarter of 2008.

     Key’s noninterest expense was $762 million for the third quarter of 2008, compared to $753 million for the same period last year. Personnel expense decreased by $2 million as increases in both salaries and severance expense were more than offset by reductions in costs associated with employee benefits and stock-based compensation. Nonpersonnel expense rose by $11 million, reflecting increases of $8 million in professional fees, $6 million in marketing expense, $5 million in net occupancy expense and $7 million resulting from the write-down or amortization of intangible assets. Included in noninterest expense for the third quarter of 2008 is $19 million of severance and other exit costs, including $10 million of expense recorded in connection with Key’s third quarter 2008 decision to exit direct and indirect retail and floor-plan lending for marine and recreational vehicle products. Key expects to record additional exit-related costs in the fourth quarter. The increase in noninterest expense relative to the year-ago quarter was moderated by a $23 million credit to miscellaneous expense, representing the reversal of the remaining litigation reserve associated with the previously reported Honsador litigation, which was settled in September.

     Compared to the second quarter of 2008, noninterest expense decreased by $19 million. Personnel expense decreased by $23 million, due primarily to lower incentive compensation accruals. Nonpersonnel expense was up $4 million, reflecting an $8 million provision for losses on lending-related commitments in the current quarter, compared to a $2 million credit in the prior quarter, a $6 million increase in marketing expense and a $4 million write-off of goodwill recorded during the third quarter in connection with Key’s decision to exit certain businesses. These increases were offset by the reversal of the remaining Honsador litigation reserve.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 5

ASSET QUALITY

     Key’s provision for loan losses from continuing operations was $407 million for the third quarter of 2008, compared to $69 million for the year-ago quarter and $647 million for the second quarter of 2008. Key’s provision for loan losses for the third quarter of 2008 exceeded its net loan charge-offs by $134 million, as the company continued to build reserves.

     As previously reported, Key has undertaken a process to aggressively reduce its exposure in the residential properties segment of its construction loan portfolio through the planned sale of certain loans. In conjunction with these efforts, Key transferred $384 million of commercial real estate loans ($719 million, net of $335 million in net charge-offs) from the held-to-maturity loan portfolio to held-for-sale status in June. As of June 30, 2008, sales had closed on $44 million of these loans, and $340 million remained to be sold. During the third quarter, Key continued to work with bidders to finalize sales terms and documentation. However, continued disruption in the financial markets has precluded the ability of certain potential buyers to obtain the necessary funding. As shown in the following table, the balance of this portfolio was reduced to $133 million at September 30, 2008, as a result of cash proceeds received from loan sales, transfers to other real estate owned (“OREO”) and both realized and unrealized losses. Key is continuing to pursue the sale of the remaining loans, all of which are on nonperforming status.

Loans Held for Sale — Residential Properties Segment of Construction Loan Portfolio

in millions
Balance at June 30, 2008	$	340
Cash proceeds from loan sales		(135	)
Loans transferred to OREO		(35	)
Realized and unrealized losses		(31	)
Payments		(6	)
Balance at September 30, 2008	$	133

     Selected asset quality statistics for Key for each of the past five quarters are presented in the following table.

Selected Asset Quality Statistics

dollars in millions	3Q08			2Q08			1Q08			4Q07			3Q07
Net loan charge-offs	$	273		$	524		$	121		$	119		$	59
Net loan charge-offs to average loans from continuing operations		1.43	%		2.75	%		.67	%		.67	%		.35	%
Nonperforming loans at period end	$	967		$	814		$	1,054		$	687		$	498
Nonperforming loans to period-end portfolio loans		1.26	%		1.07	%		1.38	%		.97	%		.72	%
Nonperforming assets at period end	$	1,239		$	1,210		$	1,115		$	764		$	570
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.61	%		1.59	%		1.46	%		1.08	%		.83	%
Allowance for loan losses	$	1,554		$	1,421		$	1,298		$	1,200		$	955
Allowance for loan losses to period-end loans		2.03	%		1.87	%		1.70	%		1.69	%		1.38	%
Allowance for loan losses to nonperforming loans		160.70			174.57			123.15			174.67			191.77

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 6

     Net loan charge-offs for the quarter totaled $273 million, or 1.43% of average loans from continuing operations, compared to $59 million, or 0.35%, for the same period last year and $524 million, or 2.75%, for the previous quarter. Net loan charge-offs from the commercial, commercial real estate and education loan portfolios totaled $62 million, $99 million and $40 million, respectively, in the current quarter. The net charge-offs in the commercial real estate portfolio reflect continued weakness in the housing market, while the education loan charge-offs are attributable to a weakening economic environment.

     Key’s net loan charge-offs by loan type for each of the past five quarters are shown in the following table.

Net Loan Charge-offs

dollars in millions	3Q08			2Q08			1Q08			4Q07			3Q07
Commercial, financial and agricultural	$	62		$	61		$	36		$	35		$	22
Real estate — commercial mortgage		20			15			4			1			2
Real estate — construction		79			339	a		25			44			6
Commercial lease financing		19			14			9			6			8
Total commercial loans		180			429			74			86			38
Home equity — Community Banking		9			9			8			6			4
Home equity — National Banking		12			10			7			6			4
Marine		16			10			16			8			5
Education		40			54	b		2			2			1
Other		16			12			14			11			7
Total consumer loans		93			95			47			33			21
Total net loan charge-offs	$	273		$	524		$	121		$	119		$	59
Net loan charge-offs to average loans from continuing operations		1.43	%		2.75	%		.67	%		.67	%		.35	%

(a)	During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs) from the loan portfolio to held-for-sale status.
(b)	On March 31, 2008, Key transferred $3.3 billion of education loans from loans held for sale to the loan portfolio.

     The company expects net loan charge-offs for the fourth quarter to be in the range of 1.20% to 1.60% of average loans.

     At September 30, 2008, Key’s nonperforming loans totaled $967 million and represented 1.26% of period-end portfolio loans, compared to 1.07% at June 30, 2008, and 0.72% at September 30, 2007. At the same time, nonperforming assets totaled $1.239 billion and represented 1.61% of portfolio loans, other real estate owned and other nonperforming assets, compared to 1.59% at June 30, 2008, and 0.83% at September 30, 2007. The decrease in nonperforming loans held for sale and the increase in OREO and other nonperforming assets during the third quarter were largely attributable to the previously discussed activity in the residential properties segment of Key’s construction loan portfolio.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 7

     The following table illustrates the trend in Key’s nonperforming assets by loan type over the past five quarters.

Nonperforming Assets

dollars in millions	3Q08			2Q08			1Q08			4Q07			3Q07
Commercial, financial and agricultural	$	309		$	259		$	147		$	84		$	94
Real estate — commercial mortgage		119			107			113			41			41
Real estate — construction		334			256			610			415			228
Commercial lease financing		55			57			38			28			30
Total consumer loans		150			135			146			119			105
Total nonperforming loans		967			814			1,054			687			498
Nonperforming loans held for sale		169			342			9			25			6
OREO and other nonperforming assets		103			54			52			52			66
Total nonperforming assets	$	1,239		$	1,210		$	1,115		$	764		$	570
Nonperforming loans to period-end portfolio loans		1.26	%		1.07	%		1.38	%		.97	%		.72	%
Nonperforming assets to period-end portfolio loans, plus OREO and other nonperforming assets		1.61			1.59			1.46			1.08			.83

     Key’s allowance for loan losses was $1.554 billion, or 2.03% of loans outstanding, at September 30, 2008, compared to $1.421 billion, or 1.87%, at June 30, 2008, and $955 million, or 1.38%, at September 30, 2007.

CAPITAL

     Key’s capital ratios, as presented in the following table, continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2008.

Capital Ratios

	9-30-08			6-30-08			3-31-08			12-31-07			9-30-07
Tier 1 risk-based capital a		8.48	%		8.53	%		8.33	%		7.44	%		7.94	%
Total risk-based capital a		12.31			12.41			12.34			11.38			11.76
Tangible equity to tangible assets		6.95			6.98			6.85			6.58			6.87

(a) 9-30-08 ratio is estimated.

     Key issued 7 million additional common shares and 75,000 additional shares of noncumulative perpetual convertible preferred stock on July 11, 2008. These shares were issued as part of the over allotment granted by Key to the underwriters in connection with the issuances of common shares and preferred stock completed during the second quarter.

     During the third quarter, Key reissued 2 million of its common shares under employee benefit plans. There was no repurchase activity by Key during the third quarter, and the company currently does not anticipate any share repurchase activity during the remainder of 2008.

     Share issuances and repurchases that caused the change in Key’s outstanding common shares over the past five quarters are summarized in the following table.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 8

Summary of Changes in Common Shares Outstanding

in thousands	3Q08		2Q08		1Q08		4Q07		3Q07
Shares outstanding at beginning of period		485,662		400,071		388,793		388,708		389,362
Common shares issued		7,066		85,106		—		—		—
Shares reissued to acquire U.S.B. Holding Co., Inc.		—		—		9,895		—		—
Shares reissued under employee benefit plans		2,037		485		1,383		85		1,346
Common shares repurchased		—		—		—		—		(2,000	)
Shares outstanding at end of period		494,765		485,662		400,071		388,793		388,708

LINE OF BUSINESS RESULTS

     The following table shows the contribution made by each major business group to Key’s taxable-equivalent revenue and (loss) income from continuing operations 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 tables at the end of this release. Key’s line of business results for all periods presented reflect a new organizational structure that took effect January 1, 2008.

Major Business Groups

										Percent change 3Q08 vs.
dollars in millions	3Q08			2Q08			3Q07			2Q08			3Q07
Revenue from continuing operations (TE)
Community Banking	$	658		$	661		$	629			(.5	)%		4.6	%
National Banking a		482			(130	)		507			N/M			(4.9	)
Other Segments		(17	)		(31	)		15			45.2			N/M
Total Segments		1,123			500			1,151			124.6			(2.4	)
Reconciling Items c		(30	)		(45	)		(1	)		33.3			N/M
Total	$	1,093		$	455		$	1,150			140.2	%		(5.0	)%
(Loss) income from continuing operations
Community Banking	$	98		$	105		$	134			(6.7	)%		(26.9	)%
National Banking a		(133	)		(672	)		70			80.2			N/M
Other Segments b		9			(13	)		16			N/M			(43.8	)
Total Segments		(26	)		(580	)		220			95.5			N/M
Reconciling Items c		(10	)		(546	)		4			98.2			N/M
Total	$	(36	)	$	(1,126	)	$	224			96.8	%		N/M

(a)	National Banking’s results for the third quarter of 2008 include $54 million ($33 million after tax) of derivative-related charges recorded as a result of market disruption caused by the failure of Lehman Brothers and $31 million ($19 million after tax) of realized and unrealized losses from the residential properties segment of the construction loan portfolio. During the second quarter of 2008, National Banking’s taxable-equivalent net interest income and net income were reduced by $838 million and $536 million, respectively, as a result of an adverse federal court decision on the tax treatment of a Service Contract Lease transaction.
(b)	Other Segments’ results for the third quarter of 2008 include a $23 million ($14 million after tax) credit, representing the reversal of the remaining litigation reserve associated with the Honsador litigation, which was settled in September.
(c)	Reconciling Items for the third and second quarters of 2008 include charges of $30 million and $475 million, respectively, to income taxes for the interest cost associated with the leveraged lease tax litigation. Reconciling Items for the third quarter of 2007 include a $27 million ($17 million after tax) gain related to MasterCard Incorporated shares.
TE = Taxable Equivalent, N/M = Not Meaningful

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 9

Community Banking

								Percent change 3Q08 vs.
dollars in millions	3Q08		2Q08		3Q07			2Q08			3Q07
Summary of operations
Net interest income (TE)	$	445	$	439	$	412			1.4	%		8.0	%
Noninterest income		213		222		217			(4.1	)		(1.8	)
Total revenue (TE)		658		661		629			(.5	)		4.6
Provision for loan losses		56		44		2			27.3			N/M
Noninterest expense		445		449		413			(.9	)		7.7
Income before income taxes (TE)		157		168		214			(6.5	)		(26.6	)
Allocated income taxes and TE adjustments		59		63		80			(6.3	)		(26.3	)
Net income	$	98	$	105	$	134			(6.7	)%		(26.9	)%
Percent of consolidated income from continuing operations		N/M		N/M		60	%		N/A			N/A
Average balances
Loans and leases	$	28,872	$	28,477	$	26,944			1.4	%		7.2	%
Total assets		31,934		31,304		29,708			2.0			7.5
Deposits		50,384		49,948		46,729			.9			7.8
Assets under management at period end	$	18,278	$	19,366	$	21,903			(5.6	)%		(16.6	)%

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

Additional Community Banking Data

										Percent change 3Q08 vs.
dollars in millions	3Q08			2Q08			3Q07			2Q08			3Q07
Average deposits outstanding
NOW and money market deposit accounts	$	19,507		$	19,656		$	20,307			(.8	)%		(3.9	)%
Savings deposits		1,752			1,804			1,569			(2.9	)		11.7
Certificates of deposit ($100,000 or more)		6,875			6,661			4,566			3.2			50.6
Other time deposits		13,103			12,735			11,485			2.9			14.1
Deposits in foreign office		1,193			1,306			1,128			(8.7	)		5.8
Noninterest-bearing deposits		7,954			7,786			7,674			2.2			3.6
Total deposits	$	50,384		$	49,948		$	46,729			.9	%		7.8	%
Home equity loans
Average balance	$	9,887		$	9,766		$	9,690
Weighted-average loan-to-value ratio		70	%		70	%		70	%
Percent first lien positions		54			55			58
Other data
Branches		986			985			954
Automated teller machines		1,479			1,479			1,439

Community Banking Summary of Operations

     Community Banking recorded net income of $98 million for the third quarter of 2008, compared to $134 million for the year-ago quarter. Increases in the provision for loan losses and noninterest expense were the primary causes of the decline, and more than offset an increase in net interest income.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 10

     Taxable-equivalent net interest income rose by $33 million, or 8%, from the third quarter of 2007. The increase was attributable to a $1.9 billion, or 7%, rise in average earning assets, due largely to growth in the commercial loan portfolio, and a $3.7 billion, or 8%, increase in average deposits. Both loans and deposits experienced organic growth and benefited from the January 1 acquisition of U.S.B. Holding Co., Inc. described below.

     The provision for loan losses rose by $54 million compared to the third quarter of 2007, reflecting a $51 million increase in net loan charge-offs, almost half of which was attributable to two specific commercial loans.

     Noninterest expense rose by $32 million or 8%, from the year-ago quarter as a result of increases in personnel expense, marketing expense, professional fees, costs associated with other real estate owned, and smaller increases in a variety of other expense components. Overall, the increase in noninterest expense was largely attributable to initiatives undertaken with regard to branch modernization, deposit growth and the acquisition of U.S.B. Holding Co., Inc.

     On January 1, 2008, Key acquired U.S.B. Holding Co., Inc., the holding company for Union State Bank, a 31-branch state-chartered commercial bank headquartered in Orangeburg, New York. The acquisition doubles Key’s branch penetration in the attractive Lower Hudson Valley area. Assets and deposits acquired in this transaction were assigned to both the Community Banking and National Banking groups.

National Banking

										Percent change 3Q08 vs.
dollars in millions	3Q08			2Q08			3Q07			2Q08			3Q07
Summary of operations
Net interest income (loss) (TE)	$	322		$	(476	)  a	$	355			N/M			(9.3	)%
Noninterest income		160	a		346			152			(53.8	)%		5.3
Total revenue (TE)		482			(130	)		507			N/M			(4.9	)
Provision for loan losses		350			609			69			(42.5	)		407.2
Noninterest expense		342			337			327			1.5			4.6
(Loss) income from continuing operations before income taxes (TE)		(210	)		(1,076	)		111			80.5			N/M
Allocated income taxes and TE adjustments		(77	)		(404	)		41			80.9			N/M
(Loss) income from continuing operations		(133	)		(672	)		70			80.2			N/M
Loss from discontinued operations, net of taxes		—			—			(14	)		—			100.0
Net (loss) income	$	(133	)	$	(672	)	$	56			80.2	%		N/M
Percent of consolidated income from continuing operations		N/M			N/M			31	%		N/A			N/A
Average balances from continuing operations
Loans and leases	$	47,075		$	47,877		$	40,279			(1.7	)%		16.9	%
Loans held for sale		1,651			1,282			4,692			28.8			(64.8	)
Total assets		56,183			56,323			50,961			(.2	)		10.2
Deposits		12,439			12,289			12,631			1.2			(1.5	)
Assets under management at period end	$	58,398		$	61,632		$	66,197			(5.2	)%		(11.8	)%

(a)

National Banking’s results for the third quarter of 2008 include $54 million ($33 million after tax) of derivative-related charges recorded as a result of market disruption caused by the failure of Lehman Brothers and $31 million ($19 million after tax) of realized and unrealized losses from the residential properties segment of the construction loan portfolio. During the second quarter of 2008, National Banking’s taxable-equivalent net interest income and net income were reduced by $838 million and $536 million, respectively, as a result of an adverse federal court decision on the tax treatment of a Service Contract Lease transaction.

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

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 11

National Banking Summary of Continuing Operations

     National Banking recorded a loss of $133 million from continuing operations for the third quarter of 2008, compared to income of $70 million from continuing operations for the same period last year. A substantially higher provision for loan losses, lower net interest income and an increase in noninterest expense were offset in part by growth in noninterest income.

     Taxable-equivalent net interest income decreased by $33 million, or 9%, from the third quarter of 2007 as a result of tighter loan and deposit spreads caused by competitive pricing, and a higher level of nonperforming assets. Also contributing to the decrease was the prospective reduction in net interest income caused by the second quarter 2008 recalculation of income previously recognized on all leveraged leases being contested by the IRS. Average loans and leases grew by $6.8 billion, or 17%, while the level of average deposits was down slightly from the year-ago quarter. Contributing to the loan growth was the March 31, 2008, transfer of $3.3 billion of education loans from loans held for sale to the loan portfolio.

     Excluding $54 million of derivative-related charges recorded in the current quarter as a result of market disruption caused by the failure of Lehman Brothers, noninterest income rose by $62 million, or 41%, from the third quarter of 2007. The improvement reflected a $15 million increase in income from trust and investment services, a $23 million reduction in net losses from loan sales and write-downs, and a $15 million decrease in losses attributable to changes in the fair values of certain real estate related investments held by the Private Equity unit within the Real Estate Capital and Corporate Banking Services line of business. Noninterest income also benefited from an increase in fee income generated from tuition payment plan processing.

     The provision for loan losses rose by $281 million, due primarily to higher levels of net loan charge-offs from the commercial, commercial real estate and education loan portfolios. National Banking’s provision for loan losses for the third quarter of 2008 exceeded its net loan charge-offs by $147 million, as the company continued to build reserves.

     Noninterest expense increased by $15 million, or 5%, from the third quarter of 2007, reflecting $10 million of additional expense attributable to severance and other costs recorded during the current quarter in connection with Key’s decision to exit direct and indirect retail and floor-plan lending for marine and recreational vehicle products.

Other Segments

     Other segments consist of Corporate Treasury and Key’s Principal Investing unit. These segments generated net income of $9 million for the third quarter of 2008, compared to $16 million for the same period last year. These results reflect less favorable results from principal investing in the current year.

Line of Business Descriptions

Community Banking

Regional Banking provides 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 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, trust, portfolio management, insurance, charitable giving and related needs.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 12

Commercial Banking provides midsize businesses with products and services that include commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, derivatives and foreign exchange.

National Banking

Real Estate Capital and Corporate Banking Services consists of two business units. Real Estate Capital is a national business that provides construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers and owner-investors. This unit deals primarily with nonowner-occupied properties (i.e., generally properties in which at least 50% of the debt service is provided by rental income from nonaffiliated third parties). Particular emphasis has been placed on providing clients with finance solutions through access to the capital markets.

Corporate Banking Services provides cash management, interest rate derivatives, and foreign exchange products and services to clients throughout the Community Banking and National Banking groups. Through its Public Sector and Financial Institutions businesses, Corporate Banking Services provides a full array of commercial banking products and services to government and not-for-profit entities, and to community banks.

Equipment Finance meets 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.

Institutional and Capital Markets through its KeyBanc Capital Markets unit, provides commercial lending, treasury management, investment banking, derivatives and foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services to large corporations and middle-market companies.

Through its Victory Capital Management unit, Institutional and Capital Markets also manages or offers 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 Finance provides government guaranteed education loans to students and their parents, and processes tuition payments for private schools. Through its Commercial Floor Plan Lending unit, this line of business also finances inventory for automobile dealers. Starting in October 2008, Consumer Finance will exit direct and indirect retail and floor-plan lending for marine and recreational vehicle products and will limit new education loans to those backed by government guarantee. It will continue to service existing loans in these portfolios and to honor existing education loan commitments. These actions are consistent with Key’s strategy of de-emphasizing nonrelationship or out-of-footprint businesses.

     Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of $101 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 986 branches and additional offices;

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 13

a network of 1,479 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, https://www.key.com/,^â 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 results and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section at https://www.key.com/ir at 9:00 a.m. ET, on Tuesday, October 21, 2008. An audio replay of the call will be available through October 28.

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

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key’s control. Key’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.

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) continued disruption in the fixed income markets; (4) adverse capital markets conditions; (5) 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; (6) continued disruption in the housing markets and related conditions in the financial markets; (7) increased competitive pressure among financial services companies due to the recent consolidation of competing financial institutions and the conversion of certain investment banks to bank holding companies; (8) heightened legal standards and regulatory practices, requirements or expectations; (9) the inability to successfully execute strategic initiatives designed to grow revenues and/or manage expenses; (10) increased FDIC deposit premiums; (11) consummation of significant business combinations or divestitures; (12) operational or risk management failures due to technological or other factors; (13) changes in accounting or tax practices or requirements; (14) new legal obligations or liabilities or unfavorable resolution of litigation; and (15) disruption in the economy and general business climate as a result of terrorist activities or military actions. For additional information on the factors that could cause Key’s actual results or financial condition to differ materially from those described in the forward-looking statements consult Key’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, and June 30, 2008, Annual Report on Form 10-K for the year ended December 31, 2007, and Current Reports on Form 8-K, filed with the Securities and Exchange Commission and available on the Securities and Exchange Commission’s website (www.sec.gov). 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 2008 Results
October 21, 2008
Page 14

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

	Three months ended
	9-30-08			6-30-08			9-30-07
Summary of operations
Net interest income (loss) (TE)	$	705		$	(100	)  a	$	712
Noninterest income		388			555			438
Total revenue (TE)		1,093			455			1,150
Provision for loan losses		407			647			69
Noninterest expense		762			781			753
(Loss) income from continuing operations		(36	)		(1,126	)		224
Loss from discontinued operations, net of taxes b		—			—			(14	)
Net (loss) income		(36	)		(1,126	)  a		210
Net (loss) income applicable to common shares		(48	)		(1,126	)		210
Per common share
(Loss) income from continuing operations	$	(.10	)	$	(2.70	)	$	.58
(Loss) income from continuing operations — assuming dilution		(.10	)		(2.70	)		.57
Loss from discontinued operations b		—			—			(.03	)
Loss from discontinued operations — assuming dilution b		—			—			(.03	)
Net (loss) income		(.10	)		(2.70	)		.54
Net (loss) income — assuming dilution		(.10	)		(2.70	)  a		.54
Cash dividends paid		.1875			.375			.365
Book value at period end		16.16			16.59			20.12
Tangible book value at period end		12.66			13.00			16.76
Market price at period end		11.94			10.98			32.33
Performance ratios — from continuing operations
Return on average total assets		(.14	)%		(4.38	)%		.93	%
Return on average common equity		(2.36	)		(53.35	)		11.50
Return on average total equity		(1.64	)		(52.56	)		11.50
Net interest margin (TE)		3.13			(.44	)		3.40
Performance ratios — from consolidated operations
Return on average total assets		(.14	)%		(4.38	)% a		.88	%
Return on average common equity		(2.36	)		(53.35	)  a		10.79
Return on average total equity		(1.64	)		(52.56	)  a		10.79
Net interest margin (TE)		3.13			(.44	)  a		3.40
Capital ratios at period end
Equity to assets		8.54	%		8.57	%		8.13	%
Tangible equity to tangible assets		6.95			6.98			6.87
Tier 1 risk-based capital c		8.48			8.53			7.94
Total risk-based capital c		12.31			12.41			11.76
Leverage c		9.46			9.34			8.96
Asset quality
Net loan charge-offs	$	273		$	524		$	59
Net loan charge-offs to average loans from continuing operations		1.43	%		2.75	%		.35	%
Allowance for loan losses	$	1,544		$	1,421		$	955
Allowance for loan losses to period-end loans		2.03	%		1.87	%		1.38	%
Allowance for loan losses to nonperforming loans		160.70			174.57			191.77
Nonperforming loans at period end	$	967		$	814		$	498
Nonperforming assets at period end		1,239			1,210			570
Nonperforming loans to period-end portfolio loans		1.26	%		1.07	%		.72	%
Nonperforming assets to period-end portfolio loans plus
OREO and other nonperforming assets		1.61			1.59			.83
Trust and brokerage assets
Assets under management	$	76,676		$	80,998		$	88,100
Nonmanaged and brokerage assets		27,187			29,905			33,273
Other data
Average full-time equivalent employees		18,291			18,164			18,567
Branches		986			985			954
Taxable-equivalent adjustment	$	6		$	(458	)	$	18

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 15

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

	Nine months ended
	9-30-08			9-30-07
Summary of operations
Net interest income (TE)	$	1,309	a	$	2,118
Noninterest income		1,471			1,741
Total revenue (TE)		2,780			3,859
Provision for loan losses		1,241			166
Noninterest expense		2,275			2,352
(Loss) income from continuing operations		(944	)		919
Loss from discontinued operations, net of taxes b		—			(25	)
Net (loss) income		(944	) a		894
Net (loss) income applicable to common shares		(956	)		894
Per common share
(Loss) income from continuing operations	$	(2.19	)	$	2.34
(Loss) income from continuing operations — assuming dilution		(2.19	)		2.31
Loss from discontinued operations b		—			(.06	)
Loss from discontinued operations — assuming dilution b		—			(.06	)
Net (loss) income		(2.19	)		2.28
Net (loss) income — assuming dilution		(2.19	) a		2.25
Cash dividends paid		.9375			1.095
Performance ratios — from continuing operations
Return on average total assets		(1.22	)%		1.31	%
Return on average common equity		(15.32	)		16.03
Return on average total equity		(14.66	)		16.03
Net interest margin (TE)		1.95			3.46
Performance ratios — from consolidated operations
Return on average total assets		(1.22	)% a		1.28	%
Return on average common equity		(15.32	) a		15.59
Return on average total equity		(14.66	) a		15.59
Net interest margin (TE)		1.95	a		3.46
Asset quality
Net loan charge-offs	$	918		$	156
Net loan charge-offs to average loans from continuing operations		1.63	%		.31	%
Other data
Average full-time equivalent employees		18,294			19,081
Taxable-equivalent adjustment	$	(461	)	$	59

(a)	The following table entitled “GAAP to Non-GAAP Reconciliations” presents certain earnings data and performance ratios, excluding charges related to the tax treatment of certain leveraged lease financing transactions disallowed by the Internal Revenue Service. The table reconciles certain GAAP performance measures to the corresponding non-GAAP measures and provides a basis for period-to-period comparisons.
(b)	Key sold the subprime mortgage loan portfolio held by the Champion Mortgage finance business in November 2006, and completed the sale of Champion’s origination platform in February 2007. As a result of these actions, Key has accounted for this business as a discontinued operation.
(c)	9-30-08 ratio is estimated.
TE = Taxable Equivalent

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 16

GAAP to Non-GAAP Reconciliations
(dollars in millions, except per share amounts)

As a result of an adverse federal court decision on Key’s tax treatment of a Service Contract Lease transaction entered into by AWG Leasing Trust, in which Key is a partner, Key recorded after-tax charges of $1.011 billion, or $2.43 per common share, during the second quarter of 2008. Additionally, during the first quarter of 2008, Key increased its tax reserves for certain lease in, lease out transactions and recalculated its lease income in accordance with prescribed accounting standards, resulting in after-tax charges of $38 million, or $0.10 per common share. The table below presents certain earnings data and performance ratios, excluding these charges (non-GAAP), reconciles the GAAP performance measures to the corresponding non-GAAP measures and provides a basis for period-to-period comparisons. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Non-GAAP financial measures should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.

	Three months ended									Nine months ended
	9-30-08			6-30-08			3-31-08			9-30-08
Net income
Net (loss) income (GAAP)	$	(36	)	$	(1,126	)	$	218		$	(944	)
Charges related to leveraged lease tax litigation, after tax		—			1,011			38			1,049
Net (loss) income, excluding charges related to leveraged lease tax litigation (non-GAAP)	$	(36	)	$	(115	)	$	256		$	105
Net (loss) income applicable to common shares (GAAP)	$	(48	)	$	(1,126	)	$	218		$	(956	)
Per common share
Net (loss) income — assuming dilution (GAAP)	$	(.10	)	$	(2.70	)	$	.54		$	(2.19	)
Net (loss) income, excluding charges related to leveraged lease tax litigation — assuming dilution (non-GAAP)		(.10	)		(.28	)		.64			.23
Performance ratios
Return on average total assets a
Average total assets	$	103,156		$	103,290		$	103,356		$	103,267
Return on average total assets (GAAP)		(.14	)%		(4.38	)%		.85	%		(1.22	)%
Return on average total assets, excluding charges related to leveraged lease tax litigation (non-GAAP)		(.14	)		(.45	)		1.00			.14
Return on average common equity a
Average common equity	$	8,077		$	8,489		$	8,445		$	8,336
Return on average common equity (GAAP)		(2.36	)%		(53.35	)%		10.38	%		(15.32	)%
Return on average common equity, excluding charges related to leveraged lease tax litigation (non-GAAP)		(2.36	)		(5.45	)		12.19			1.49
Return on average total equity a
Average total equity	$	8,734		$	8,617		$	8,445		$	8,599
Return on average total equity (GAAP)		(1.64	)%		(52.56	)%		10.38	%		(14.66	)%
Return on average total equity, excluding charges related to leveraged lease tax litigation (non-GAAP)		(1.64	)		(5.37	)		12.19			1.63
Net interest income and margin
Net interest income
Net interest income (GAAP)	$	699		$	358		$	713		$	1,770
Charges related to leveraged lease tax litigation, pre-tax		—			359			3			362
Net interest income, excluding charges related to leveraged lease tax litigation (non-GAAP)	$	699		$	717		$	716		$	2,132
Net interest income/margin (TE)
Net interest income (loss) (TE) (as reported)	$	705		$	(100	)	$	704		$	1,309
Charges related to leveraged lease tax litigation, pre-tax (TE)		—			838			34			872
Net interest income, excluding charges related to leveraged lease tax litigation (TE) (adjusted basis)	$	705		$	738		$	738		$	2,181
Net interest margin (TE) (as reported) a		3.13	%		(.44	)%		3.14	%		1.95	%
Impact of charges related to leveraged lease tax litigation, pre-tax (TE) a		—			3.76			.15			1.30
Net interest margin, excluding charges related to leveraged lease tax litigation (TE) (adjusted basis) a		3.13	%		3.32	%		3.29	%		3.25	%

(a)	Income statement amount has been annualized in calculation of percentage.
TE = Taxable Equivalent
GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 17

Consolidated Balance Sheets
(dollars in millions)

	9-30-08			6-30-08			9-30-07
ASSETS
Loans	$	76,705		$	75,855		$	68,999
Loans held for sale		1,475			1,833			4,791
Securities available for sale		8,391			8,312			7,915
Held-to-maturity securities		28			25			36
Trading account assets		1,449			1,483			1,060
Short-term investments		653			826			528
Other investments		1,556			1,559			1,509
Total earning assets		90,257			89,893			84,838
Allowance for loan losses		(1,554	)		(1,421	)		(955	)
Cash and due from banks		1,937			1,912			2,016
Premises and equipment		801			748			631
Operating lease assets		1,030			1,089			1,135
Goodwill		1,595			1,598			1,202
Other intangible assets		135			146			105
Corporate-owned life insurance		2,940			2,917			2,845
Derivative assets		951			1,693			539
Accrued income and other assets		3,198			2,969			3,781
Total assets	$	101,290		$	101,544		$	96,137
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	25,789		$	27,278		$	24,198
Savings deposits		1,731			1,809			1,544
Certificates of deposit ($100,000 or more)		10,316			8,699			6,672
Other time deposits		13,929			12,541			11,403
Total interest-bearing deposits		51,765			50,327			43,817
Noninterest-bearing deposits		11,122			10,561			14,003
Deposits in foreign office — interest-bearing		1,791			3,508			5,894
Total deposits		64,678			64,396			63,714
Federal funds purchased and securities sold under repurchase agreements		1,799			2,088			5,398
Bank notes and other short-term borrowings		5,352			5,985			2,429
Derivative liabilities		589			637			218
Accrued expense and other liabilities		4,624			4,626			5,009
Long-term debt		15,597			15,106			11,549
Total liabilities		92,639			92,838			88,317
SHAREHOLDERS’ EQUITY
Preferred stock		658			650			—
Common shares		584			577			492
Capital surplus		2,552			2,544			1,617
Retained earnings		7,320			7,461			8,788
Treasury stock, at cost		(2,616	)		(2,675	)		(3,023	)
Accumulated other comprehensive income (loss)		153			149			(54	)
Total shareholders’ equity		8,651			8,706			7,820
Total liabilities and shareholders’ equity	$	101,290		$	101,544		$	96,137
Common shares outstanding (000)		494,765			485,662			388,708

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 18

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

	Three months ended									Nine months ended
	9-30-08			6-30-08			9-30-07			9-30-08			9-30-07
Interest income
Loans	$	1,066		$	717		$	1,209		$	2,906		$	3,546
Loans held for sale		21			20			91			128			248
Securities available for sale		110			111			106			330			312
Held-to-maturity securities		1			—			—			2			1
Trading account assets		16			10			11			39			26
Short-term investments		6			8			5			23			24
Other investments		12			14			12			38			40
Total interest income		1,232			880			1,434			3,466			4,197
Interest expense
Deposits		347			347			482			1,122			1,362
Federal funds purchased and securities sold under repurchase agreements		10			15			55			53			163
Bank notes and other short-term borrowings		34			27			30			100			59
Long-term debt		142			133			173			421			554
Total interest expense		533			522			740			1,696			2,138
Net interest income		699			358			694			1,770			2,059
Provision for loan losses		407			647			69			1,241			166
Net interest income (loss) after provision for loan losses		292			(289	)		625			529			1,893
Noninterest income
Trust and investment services income		133			138			119			400			359
Service charges on deposit accounts		94			93			88			275			247
Investment banking and capital markets (loss) income		(31	)		80			9			57			105
Operating lease income		69			68			70			206			200
Letter of credit and loan fees		53			51			51			141			134
Corporate-owned life insurance income		28			28			27			84			84
Electronic banking fees		27			27			25			78			74
Net (losses) gains from loan securitizations and sales		(30	)		33			(53	)		(98	)		(11	)
Net securities gains (losses)		1			(1	)		4			3			(41	)
Net (losses) gains from principal investing		(24	)		(14	)		9			(29	)		128
Gain from redemption of Visa Inc. shares		—			—			—			165			—
Gain from sale of McDonald Investments branch network		—			—			—			—			171
Other income		68			52			89			189			291
Total noninterest income		388			555			438			1,471			1,741
Noninterest expense
Personnel		381			404			383			1,194			1,222
Net occupancy		65			62			60			193			182
Computer processing		46			43			49			136			149
Operating lease expense		56			55			58			169			165
Professional fees		35			33			27			91			79
Equipment		23			23			22			70			71
Marketing		27			21			21			62			60
Other expense		129			140			133			360			424
Total noninterest expense		762			781			753			2,275			2,352
(Loss) income from continuing operations before income taxes		(82	)		(515	)		310			(275	)		1,282
Income taxes		(46	)		611			86			669			363
(Loss) income from continuing operations		(36	)		(1,126	)		224			(944	)		919
Loss from discontinued operations, net of taxes		—			—			(14	)		—			(25	)
Net (loss) income	$	(36	)	$	(1,126	)	$	210		$	(944	)	$	894
Net (loss) income applicable to common shares	$	(48	)	$	(1,126	)	$	210		$	(956	)	$	894
Per common share:
(Loss) income from continuing operations	$	(.10	)	$	(2.70	)	$	.58		$	(2.19	)	$	2.34
Net (loss) income		(.10	)		(2.70	)		.54			(2.19	)		2.28
Per common share — assuming dilution:
(Loss) income from continuing operations	$	(.10	)	$	(2.70	)	$	.57		$	(2.19	)	$	2.31
Net (loss) income		(.10	)		(2.70	)		.54			(2.19	)		2.25
Cash dividends declared per common share	$	.1875		$	.375		$	.365		$	.9375		$	1.095
Weighted-average common shares outstanding (000)		491,179			416,629			389,319			435,846			393,048
Weighted-average common shares and potential common shares outstanding (000)		491,179			416,629			393,164			435,846			397,816

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 19

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

	Third Quarter 2008								Second Quarter 2008									Third Quarter 2007
	Average								Average									Average
	Balance			Interest		Yield/Rate			Balance			Interest			Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans: a,b
Commercial, financial and agricultural	$	26,345		$	356		5.38	%	$	26,057		$	352			5.42	%	$	22,393		$	410		7.25	%
Real estate — commercial mortgage		10,718			158		5.87			10,593			156			5.91			8,855			172		7.69
Real estate — construction		7,806			109		5.53			8,484			118			5.61			8,285			167		8.01
Commercial lease financing		9,585			108		4.52			9,798			(709	)		(28.94	) c		10,172			147		5.80
Total commercial loans		54,454			731		5.35			54,932			(83	)		(.58	)		49,705			896		7.16
Real estate — residential		1,899			28		6.04			1,918			30			6.12			1,586			26		6.68
Home equity:
Community Banking		9,887			141		5.64			9,765			140			5.78			9,690			175		7.14
National Banking		1,138			22		7.65			1,200			23			7.68			1,193			24		7.85
Total home equity loans		11,025			163		5.85			10,965			163			5.99			10,883			199		7.22
Consumer other — Community Banking		1,264			33		10.37			1,271			33			10.34			1,342			36		10.66
Consumer other — National Banking:
Marine		3,586			57		6.33			3,646			56			6.26			3,506			55		6.32
Education		3,635			54		5.90			3,595			53			5.88			332			8		9.65
Other		308			6		8.22			325			7			8.21			326			7		8.92
Total consumer other — National Banking		7,529			117		6.20			7,566			116			6.16			4,164			70		6.79
Total consumer loans		21,717			341		6.25			21,720			342			6.32			17,975			331		7.33
Total loans		76,171			1,072		5.60			76,652			259			1.37			67,680			1,227		7.20
Loans held for sale		1,723			21		4.76			1,356			20			5.94			4,731			91		7.59
Securities available for sale a,d		8,266			110		5.38			8,315			111			5.40			7,825			106		5.45
Held-to-maturity securities a		27			1		13.81			25			—			11.47			36			—		6.43
Trading account assets		1,579			16		4.02			1,041			10			3.88			1,055			11		4.39
Short-term investments		794			6		3.44			773			8			3.83			633			5		3.32
Other investments d		1,563			12		2.87			1,580			14			3.09			1,563			12		2.99
Total earning assets		90,123			1,238		5.47			89,742			422			1.89			83,523			1,452		6.92
Allowance for loan losses		(1,498	)							(1,338	)								(942	)
Accrued income and other assets		14,531								14,886									12,581
Total assets	$	103,156							$	103,290								$	95,162
Liabilities
NOW and money market deposit accounts	$	26,657			108		1.61		$	27,158			102			1.51		$	24,190			209		3.41
Savings deposits		1,783			1		.21			1,815			1			.27			1,581			—		.19
Certificates of deposit ($100,000 or more)e		9,506			97		4.05			8,670			88			4.09			6,274			80		5.06
Other time deposits		13,118			129		3.92			12,751			135			4.27			11,512			136		4.68
Deposits in foreign office		2,762			12		1.77			4,121			21			1.95			4,540			57		5.00
Total interest-bearing deposits		53,826			347		2.57			54,515			347			2.56			48,097			482		3.98
Federal funds purchased and securities sold under repurchase agreements		2,546			10		1.58			3,267			15			1.86			4,470			55		4.85
Bank notes and other short-term borrowings		4,843			34		2.72			4,770			27			2.26			2,539			30		4.70
Long-term debt e,f		15,123			142		3.91			14,620			133			3.87			11,801			173		5.89
Total interest-bearing liabilities		76,338			533		2.80			77,172			522			2.75			66,907			740		4.40
Noninterest-bearing deposits		10,756								10,617									14,424
Accrued expense and other liabilities		7,328								6,884									6,106
Total liabilities		94,422								94,673									87,437
Shareholders’ equity
Preferred stock		657								128									—
Common shareholders’ equity		8,077								8,489									7,725
Total shareholders’ equity		8,734								8,617									7,725
Total liabilities and shareholders’ equity	$	103,156							$	103,290								$	95,162
Interest rate spread (TE)							2.67	%								(.86	)%							2.52	%
Net interest income (loss) (TE) and net interest margin (TE)					705		3.13	%					(100	) c		(.44	)%c					712		3.40	%
TE adjustment a					6								(458	)								18
Net interest income, GAAP basis				$	699							$	358								$	694

Average balances have not been restated to reflect Key’s January 1, 2008, adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts,” and FASB Staff Position FIN 39-1, “Amendment of FASB Interpretation 39.”

(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 second quarter of 2008, Key’s taxable-equivalent net interest income and net income were reduced by $838 million and $1.011 billion, respectively, as a result of an adverse federal court decision on Key’s tax treatment of a Service Contract Lease transaction. Excluding this reduction, the taxable-equivalent yield on Key’s commercial lease financing portfolio would have been 5.25% for the second quarter of 2008, and Key’s taxable-equivalent net interest margin would have been 3.32%. During the prior quarter, Key increased its tax reserves for certain lease in, lease out transactions and recalculated its lease income in accordance with prescribed accounting standards. These actions reduced Key’s first quarter 2008 taxable-equivalent net interest income and net income by $34 million and $38 million, respectively. Excluding this reduction, the taxable-equivalent yield on Key’s commercial lease financing portfolio would have been 5.27% for the first quarter of 2008, and Key’s taxable-equivalent net interest margin would have been 3.29%.
(d)	Yield is calculated on the basis of amortized cost.
(e)	Rate calculation excludes basis adjustments related to fair value hedges.
(f)	Results from continuing operations exclude the dollar amount of liabilities assumed necessary to support interest-earning assets held by the discontinued Champion Mortgage finance business. The interest expense related to these liabilities, which also is excluded from continuing operations, was calculated using a matched funds transfer pricing methodology.
TE = Taxable Equivalent
GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 20

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

	Nine months ended September 30, 2008									Nine months ended September 30, 2007
	Average									Average
	Balance			Interest			Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans: a,b
Commercial, financial and agricultural	$	25,939		$	1,100			5.66	%	$	21,940		$	1,203		7.33	%
Real estate — commercial mortgage		10,532			489			6.20			8,617			500		7.76
Real estate — construction		8,251			361			5.84			8,252			500		8.10
Commercial lease financing		9,795			(503	)		(6.85	) c		10,121			435		5.73
Total commercial loans		54,517			1,447			3.55			48,930			2,638		7.20
Real estate — residential		1,911			88			6.15			1,501			74		6.61
Home equity:
Community Banking		9,782			435			5.93			9,676			518		7.15
National Banking		1,199			69			7.69			1,105			65		7.86
Total home equity loans		10,981			504			6.13			10,781			583		7.22
Consumer other — Community Banking		1,280			100			10.43			1,387			109		10.47
Consumer other — National Banking:
Marine		3,626			171			6.30			3,317			156		6.29
Education		2,535			114			5.98			334			24		9.57
Other		324			20			8.25			312			21		9.03
Total consumer other — National Banking		6,485			305			6.27			3,963			201		6.78
Total consumer loans		20,657			997			6.44			17,632			967		7.33
Total loans		75,174			2,444			4.34			66,562			3,605		7.24
Loans held for sale		2,684			128			6.35			4,365			248		7.59
Securities available for sale a,d		8,333			331			5.35			7,723			312		5.39
Held-to-maturity securities a		27			2			12.06			38			1		6.79
Trading account assets		1,233			39			4.22			875			26		3.97
Short-term investments		910			23			3.44			718			24		4.56
Other investments d		1,565			38			3.00			1,502			40		3.43
Total earning assets		89,926			3,005			4.46			81,783			4,256		6.95
Allowance for loan losses		(1,358	)								(942	)
Accrued income and other assets		14,699									12,727
Total assets	$	103,267								$	93,568
Liabilities
NOW and money market deposit accounts	$	26,936			349			1.73		$	23,525			565		3.21
Savings deposits		1,821			5			.37			1,614			2		.19
Certificates of deposit ($100,000 or more) e		8,752			280			4.27			6,221			235		5.04
Other time deposits		12,877			410			4.26			11,872			415		4.68
Deposits in foreign office		4,240			78			2.45			3,804			145		5.10
Total interest-bearing deposits		54,626			1,122			2.74			47,036			1,362		3.87
Federal funds purchased and securities sold under repurchase agreements		3,223			53			2.20			4,376			163		4.97
Bank notes and other short-term borrowings		4,849			100			2.74			1,813			59		4.37
Long-term debt e, f		14,330			421			4.14			12,769			554		5.87
Total interest-bearing liabilities		77,028			1,696			2.97			65,994			2,138		4.34
Noninterest-bearing deposits		10,705									13,867
Accrued expense and other liabilities		6,935									6,041
Total liabilities		94,668									85,902
Shareholders’ equity
Preferred stock		263									—
Common shareholders’ equity		8,336									7,666
Total shareholders’ equity		8,599									7,666
Total liabilities and shareholders’ equity	$	103,267								$	93,568
Interest rate spread (TE)								1.49	%							2.61	%
Net interest income (TE) and net interest margin (TE)					1,309	c		1.95	%c					2,118		3.46	%
TE adjustment a					(461	)								59
Net interest income, GAAP basis				$	1,770								$	2,059

Average balances have not been restated to reflect Key’s January 1, 2008, adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts,” and FASB Staff Position FIN 39-1, “Amendment of FASB Interpretation 39.”

(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 second quarter of 2008, Key’s taxable-equivalent net interest income and net income were reduced by $838 million and $1.011 billion, respectively, as a result of an adverse federal court decision on Key’s tax treatment of a Service Contract Lease transaction. During the prior quarter, Key’s taxable-equivalent net interest income and net income were reduced by $34 million and $38 million, respectively, as a result of an increase to Key’s tax reserves for certain lease in, lease out transactions and a recalculation of its lease income in accordance with prescribed accounting standards. Excluding these reductions, the taxable-equivalent yield on Key’s commercial lease financing portfolio would have been 5.02% for the first nine months of 2008, and Key’s taxable-equivalent net interest margin would have been 3.25%.
(d)	Yield is calculated on the basis of amortized cost.
(e)	Rate calculation excludes basis adjustments related to fair value hedges.
(f)	Results from continuing operations exclude the dollar amount of liabilities assumed necessary to support interest-earning assets held by the discontinued Champion Mortgage finance business. The interest expense related to these liabilities, which also is excluded from continuing operations, was calculated using a matched funds transfer pricing methodology.
TE = Taxable Equivalent
GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 21

Noninterest Income
(in millions)

	Three months ended									Nine months ended
	9-30-08			6-30-08			9-30-07			9-30-08			9-30-07
Trust and investment services income a	$	133		$	138		$	119		$	400		$	359
Service charges on deposit accounts		94			93			88			275			247
Investment banking and capital markets (loss) income a		(31	)		80			9			57			105
Operating lease income		69			68			70			206			200
Letter of credit and loan fees		53			51			51			141			134
Corporate-owned life insurance income		28			28			27			84			84
Electronic banking fees		27			27			25			78			74
Net (losses) gains from loan securitizations and sales		(30	)		33			(53	)		(98	)		(11	)
Net securities gains (losses)		1			(1	)		4			3			(41	)
Net (losses) gains from principal investing		(24	)		(14	)		9			(29	)		128
Gain from redemption of Visa Inc. shares		—			—			—			165			—
Gain from sale of McDonald Investments branch network		—			—			—			—			171
Other income:
Insurance income		15			20			16			50			45
Loan securitization servicing fees		4			5			5			13			16
Credit card fees		6			3			4			13			10
Gains related to MasterCard Incorporated shares		—			—			27			—			67
Litigation settlement — automobile residual value insurance		—			—			—			—			26
Miscellaneous income		43			24			37			113			127
Total other income		68			52			89			189			291
Total noninterest income	$	388		$	555		$	438		$	1,471		$	1,741

(a) Additional detail provided in tables below.

Trust and Investment Services Income
(in millions)

	Three months ended						Nine months ended
	9-30-08		6-30-08		9-30-07		9-30-08		9-30-07
Brokerage commissions and fee income	$	37	$	41	$	26	$	111	$	94
Personal asset management and custody fees		38		40		41		119		122
Institutional asset management and custody fees		58		57		52		170		143
Total trust and investment services income	$	133	$	138	$	119	$	400	$	359

Investment Banking and Capital Markets Income
(in millions)

	Three months ended								Nine months ended
	9-30-08			6-30-08		9-30-07			9-30-08			9-30-07
Investment banking income	$	20		$	36	$	22		$	78		$	65
(Loss) income from other investments		(7	)		1		(22	)		(12	)		(11	)
Dealer trading and derivatives (loss) income		(57	)		28		(2	)		(50	)		18
Foreign exchange income		13			15		11			41			33
Total investment banking and capital markets (loss) income	$	(31	)	$	80	$	9		$	57		$	105

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 22

Noninterest Expense
(dollars in millions)

	Three months ended								Nine months ended
	9-30-08		6-30-08			9-30-07			9-30-08			9-30-07
Personnel a	$	381	$	404		$	383		$	1,194		$	1,222
Net occupancy		65		62			60			193			182
Computer processing		46		43			49			136			149
Operating lease expense		56		55			58			169			165
Professional fees		35		33			27			91			79
Equipment		23		23			22			70			71
Marketing		27		21			21			62			60
Other expense:
Postage and delivery		11		12			11			34			34
Franchise and business taxes		7		8			8			23			25
Telecommunications		7		7			7			22			21
Provision (credit) for losses on lending-related commitments		8		(2	)		5			(21	)		3
Miscellaneous expense		96		115			102			302			341
Total other expense		129		140			133			360			424
Total noninterest expense	$	762	$	781		$	753		$	2,275		$	2,352
Average full-time equivalent employees		18,291		18,164			18,567	b		18,294			19,081	b

(a)	Additional detail provided in table below.
(b)	The number of average full-time equivalent employees has not been adjusted for discontinued operations.

Personnel Expense
(in millions)

	Three months ended						Nine months ended
	9-30-08		6-30-08		9-30-07		9-30-08		9-30-07
Salaries	$	245	$	235	$	240	$	719	$	721
Incentive compensation		55		79		55		208		212
Employee benefits		59		65		67		200		222
Stock-based compensation		8		17		17		39		57
Severance		14		8		4		28		10
Total personnel expense	$	381	$	404	$	383	$	1,194	$	1,222

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 23

Loan Composition
(dollars in millions)

								Percent change 9-30-08 vs.
	9-30-08		6-30-08			9-30-07		6-30-08			9-30-07
Commercial, financial and agricultural	$	27,207	$	25,929		$	23,192		4.9	%		17.3	%
Commercial real estate:
Commercial mortgage		10,569		10,737			9,272		(1.6	)		14.0
Construction		7,708		7,849			8,214		(1.8	)		(6.2	)
Total commercial real estate loans		18,277		18,586	a		17,486		(1.7	)		4.5
Commercial lease financing		9,437		9,610			10,309		(1.8	)		(8.5	)
Total commercial loans		54,921		54,125			50,987		1.5			7.7
Real estate — residential mortgage		1,898		1,928			1,583		(1.6	)		19.9
Home equity:
Community Banking		9,970		9,851			9,674		1.2			3.1
National Banking		1,101		1,153			1,230		(4.5	)		(10.5	)
Total home equity loans		11,071		11,004			10,904		.6			1.5
Consumer other — Community Banking		1,274		1,261			1,308		1.0			(2.6	)
Consumer other — National Banking:
Marine		3,529		3,634			3,549		(2.9	)		(.6	)
Education		3,711		3,584	b		334		3.5			N/M
Other		301		319			334		(5.6	)		(9.9	)
Total consumer other — National Banking		7,541		7,537			4,217		.1			78.8
Total consumer loans		21,784		21,730			18,012		.2			20.9
Total loans	$	76,705	$	75,855		$	68,999		1.1	%		11.2	%

Loans Held for Sale Composition
(dollars in millions)

								Percent change 9-30-08 vs.
	9-30-08		6-30-08			9-30-07		6-30-08			9-30-07
Commercial, financial and agricultural	$	159	$	212		$	67		(25.0	)%		137.3	%
Real estate — commercial mortgage		718		994			1,560		(27.8	)		(54.0	)
Real estate — construction		262		398	a		237		(34.2	)		10.5
Commercial lease financing		52		42			5		23.8			940.0
Real estate — residential mortgage		57		79			36		(27.8	)		58.3
Home equity		—		—			1		—			(100.0	)
Education		223		103	b		2,877		116.5			(92.2	)
Automobile		4		5			8		(20.0	)		(50.0	)
Total loans held for sale	$	1,475	$	1,833		$	4,791		(19.5	)%		(69.2	)%

(a)	During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs) from the loan portfolio to held-for-sale status.
(b)	On March 31, 2008, Key transferred $3.3 billion of education loans from loans held for sale to the loan portfolio.
N/M = Not Meaningful

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 24

Summary of Loan Loss Experience
(dollars in millions)

	Three months ended									Nine months ended
	9-30-08			6-30-08			9-30-07			9-30-08			9-30-07
Average loans outstanding from continuing operations	$	76,171		$	76,652		$	67,680		$	75,174		$	66,562
Allowance for loan losses at beginning of period	$	1,421		$	1,298		$	945		$	1,200		$	944
Loans charged off:
Commercial, financial and agricultural		75			75			33			200			80
Real estate ___ commercial mortgage		21			15			2			40			13
Real estate ___ construction		80			340			7			445			10
Total commercial real estate loans		101			355	a		9			485	a		23
Commercial lease financing		24			18			11			57			33
Total commercial loans		200			448			53			742			136
Real estate — residential mortgage		2			2			1			8			3
Home equity:
Community Banking		10			9			5			28			15
National Banking		12			11			4			30			10
Total home equity loans		22			20			9			58			25
Consumer other — Community Banking		11			11			8			31			23
Consumer other — National Banking:
Marine		20			16			8			55			22
Education		41			55	b		1			98			3
Other		4			2			2			10			6
Total consumer other — National Banking		65			73			11			163			31
Total consumer loans		100			106			29			260			82
Total loans charged off		300			554			82			1,002			218
Recoveries:
Commercial, financial and agricultural		13			14			11			41			24
Real estate ___ commercial mortgage		1			—			—			1			4
Real estate ___ construction		1			1			1			2			1
Total commercial real estate loans		2			1			1			3			5
Commercial lease financing		5			4			3			15			10
Total commercial loans		20			19			15			59			39
Real estate — residential mortgage		—			1			—			1			1
Home equity:
Community Banking		1			—			1			2			3
National Banking		—			1			—			1			1
Total home equity loans		1			1			1			3			4
Consumer other — Community Banking		1			1			3			4			6
Consumer other — National Banking:
Marine		4			6			3			13			9
Education		1			1			—			2			1
Other		—			1			1			2			2
Total consumer other — National Banking		5			8			4			17			12
Total consumer loans		7			11			8			25			23
Total recoveries		27			30			23			84			62
Net loan charge-offs		(273	)		(524	)		(59	)		(918	)		(156	)
Provision for loan losses from continuing operations		407			647			69			1,241			166
Allowance related to loans acquired, net		—			—			—			32			—
Foreign currency translation adjustment		(1	)		—			—			(1	)		1
Allowance for loan losses at end of period	$	1,554		$	1,421		$	955		$	1,554		$	955
Net loan charge-offs to average loans from continuing operations		1.43	%		2.75	%		.35	%		1.63	%		.31	%
Allowance for loan losses to period-end loans		2.03			1.87			1.38			2.03			1.38
Allowance for loan losses to nonperforming loans		160.70			174.57			191.77			160.70			191.77

(a)	During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs) from the loan portfolio to held-for-sale status.
(b)	On March 31, 2008, Key transferred $3.3 billion of education loans from loans held for sale to the loan portfolio.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 25

Changes in Liability for Credit Losses on Lending-Related Commitments
(in millions)

	Three months ended							Nine months ended
	9-30-08		6-30-08			9-30-07		9-30-08			9-30-07
Balance at beginning of period	$	51	$	53		$	50	$	80		$	53
Provision (credit) for losses on lending- related commitments		8		(2	)		5		(21	)		3
Charge-offs		—		—			—		—			(1	)
Balance at end of period a	$	59	$	51		$	55	$	59		$	55

(a) Included in “accrued expense and other liabilities” on the consolidated balance sheet.

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

	9-30-08			6-30-08			3-31-07			12-31-07			9-30-07
Commercial, financial and agricultural	$	309		$	259		$	147		$	84		$	94
Real estate — commercial mortgage		119			107			113			41			41
Real estate — construction		334			256			610			415			228
Total commercial real estate loans		453			363	b		723			456			269
Commercial lease financing		55			57			38			28			30
Total commercial loans		817			679			908			568			393
Real estate — residential mortgage		35			32			34			28			29
Home equity:
Community Banking		70			61			60			54			50
National Banking		16			14			14			12			11
Total home equity loans		86			75			74			66			61
Consumer other — Community Banking		3			2			2			2			2
Consumer other — National Banking:
Marine		22			20			20			20			12
Education		3			4			15			2			—
Other		1			2			1			1			1
Total consumer other — National Banking		26			26			36			23			13
Total consumer loans		150			135			146			119			105
Total nonperforming loans		967			814			1,054			687			498
Nonperforming loans held for sale		169			342	b		9			25			6
OREO		64			26			29			21			21
Allowance for OREO losses		(4	)		(2	)		(2	)		(2	)		(1	)
OREO, net of allowance		60			24			27			19			20
Other nonperforming assets a		43			30			25			33			46
Total nonperforming assets	$	1,239		$	1,210		$	1,115		$	764		$	570
Accruing loans past due 90 days or more	$	328		$	367		$	283		$	231		$	190
Accruing loans past due 30 through 89 days		937			852			1,169			843			717
Nonperforming loans to period-end portfolio loans		1.26	%		1.07	%		1.38	%		.97	%		.72	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.61			1.59			1.46			1.08			.83

Summary of Changes in Nonperforming Loans
(in millions)

	3Q08			2Q08			1Q08			4Q07			3Q07
Balance at beginning of period	$	814		$	1,054		$	687		$	498		$	276
Loans placed on nonaccrual status		530			789			566			378			337
Charge-offs		(300	)		(547	)		(144	)		(147	)		(81	)
Loans sold		(1	)		(48	)		—			(13	)		(6	)
Payments		(43	)		(86	)		(32	)		(17	)		(13	)
Transfers to OREO		—			—			(10	)		(5	)		(12	)
Transfer to nonperforming loans held for sale		(30	)		(342	)b		(8	)		—			—
Loans returned to accrual status		(3	)		(6	)		(5	)		(7	)		(3	)
Balance at end of period	$	967		$	814		$	1,054		$	687		$	498

(a)	Primarily investments held by the Private Equity unit within Key’s Real Estate Capital and Corporate Banking Services line of business.
(b)	During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs) from the loan portfolio to held-for-sale status.

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 26

Line of Business Results
(dollars in millions)

Community Banking

																Percent change 3Q08 vs.
	3Q08			2Q08			1Q08			4Q07			3Q07			2Q08			3Q07
Summary of operations
Total revenue (TE)	$	658		$	661		$	630		$	654		$	629			(.5)	%		4.6	%
Provision for loan losses		56			44			18			36			2			27.3			N/M
Noninterest expense		445			449			429			438			413			(.9	)		7.7
Net income		98			105			114			113			134			(6.7	)		(26.9	)
Average loans and leases		28,872			28,477			28,094			27,234			26,944			1.4			7.2
Average deposits		50,384			49,948			49,769			47,254			46,729			.9			7.8
Net loan charge-offs		70			38			30			31			19			84.2			268.4
Net loan charge-offs to average loans		.96	%		.54	%		.43	%		.45	%		.28	%		N/A			N/A
Nonperforming assets at period end	$	225		$	218		$	204		$	153		$	159			3.2			41.5
Return on average allocated equity		12.84	%		13.81	%		15.34	%		17.76	%		21.20	%		N/A			N/A
Average full-time equivalent employees		8,949			8,785			8,714			8,454			8,625			1.9			3.8
Supplementary information (lines of business)
Regional Banking
Total revenue (TE)	$	557		$	559		$	530		$	556		$	534			(.4)	%		4.3	%
Provision for loan losses		39			25			13			26			12			56.0			225.0
Noninterest expense		399			401			386			386			367			(.5	)		8.7
Net income		74			83			82			91			97			(10.8	)		(23.7	)
Average loans and leases		19,794			19,621			19,560			18,771			18,667			.9			6.0
Average deposits		46,655			46,246			46,178			43,696			43,237			.9			7.9
Net loan charge-offs		41			33			29			26			17			24.2			141.2
Net loan charge-offs to average loans		.82	%		.68	%		.60	%		.55	%		.36	%		N/A			N/A
Nonperforming assets at period end	$	168		$	157		$	142		$	119		$	119			7.0			41.2
Return on average allocated equity		13.67	%		15.21	%		15.14	%		20.75	%		22.03	%		N/A			N/A
Average full-time equivalent employees		8,603			8,439			8,365			8,101			8,264			1.9			4.1
Commercial Banking
Total revenue (TE)	$	101		$	102		$	100		$	98			95.00			(1.0)	%		6.3	%
Provision for loan losses		17			19			5			10			(10	)		(10.5	)		N/M
Noninterest expense		46			48			43			52			46			(4.2	)		—
Net income		24			22			32			22			37			9.1			(35.1	)
Average loans and leases		9,078			8,856			8,534			8,463			8,277			2.5			9.7
Average deposits		3,729			3,702			3,591			3,558			3,492			.7			6.8
Net loan charge-offs		29			5			1			5			2			480.0			N/M
Net loan charge-offs to average loans		1.27	%		.23	%		.05	%		.23	%		.10	%		N/A			N/A
Nonperforming assets at period end	$	57		$	61		$	62		$	34		$	40			(6.6	)		42.5
Return on average allocated equity		10.83	%		10.25	%		15.87	%		11.12	%		19.29	%		N/A			N/A
Average full-time equivalent employees		346			346			349			353			361			—			(4.2	)

KeyCorp Reports Third Quarter 2008 Results
October 21, 2008
Page 27

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

National Banking

																Percent change 3Q08 vs.
	3Q08			2Q08			1Q08			4Q07			3Q07			2Q08			3Q07
Summary of operations
Total revenue (TE)	$	482		$	(130	)	$	438		$	610		$	507			N/M			(4.9)	%
Provision for loan losses		350			609			169			327			69			(42.5)	%		407.2
Noninterest expense		342			337			308			388			327			1.5			4.6
(Loss) income from continuing operations		(133	)		(672	)		(24	)		(68	)		70			80.2			N/M
Net (loss) income		(133	)		(672	)		(24	)		(65	)		56			80.2			N/M
Average loans and leases a		47,075			47,877			44,162			42,040			40,279			(1.7	)		16.9
Average loans held for sale a		1,651			1,282			4,932			4,709			4,692			28.8			(64.8	)
Average deposits a		12,439			12,289			11,885			12,629			12,631			1.2			(1.5	)
Net loan charge-offs a		203			486			91			88			40			(58.2	)		407.5
Net loan charge-offs to average loans a		1.72	%		4.08	%		.83	%		.83	%		.39	%		N/A			N/A
Nonperforming assets at period end	$	1,014		$	992		$	911		$	611		$	410			2.2			147.3
Return on average allocated equity a		(10.28)	%		(51.59)	%		(1.96)	%		(6.02)	%		6.62	%		N/A			N/A
Return on average allocated equity		(10.28	)		(51.59	)		(1.96	)		(5.75	)		5.30			N/A			N/A
Average full-time equivalent employees		3,589			3,603			3,758			4,010			3,869			(.4	)		(7.2	)
Supplementary information (lines of business)
Real Estate Capital and Corporate Banking Services
Total revenue (TE)	$	92		$	233		$	80		$	159		$	128			(60.5)	%		(28.1)	%
Provision for loan losses		99			366			45			270			43			(73.0	)		130.2
Noninterest expense		89			68			61			118			88			30.9			1.1
Net (loss)		(60	)		(126	)		(16	)		(143	)		(2	)		52.4			N/M
Average loans and leases		16,447			17,086			16,497			15,003			14,160			(3.7	)		16.2
Average loans held for sale		792			616			989			1,257			1,584			28.6			(50.0	)
Average deposits		10,446			10,460			9,785			10,397			10,243			(.1	)		2.0
Net loan charge-offs		100			376			38			45			7			(73.4	)		N/M
Net loan charge-offs to average loans		2.42	%		8.85	%		.93	%		1.19	%		.20	%		N/A			N/A
Nonperforming assets at period end	$	714		$	779		$	732		$	475		$	281			(8.3	)		154.1
Return on average allocated equity		(11.76)	%		(23.61)	%		(3.42)	%		(36.89)	%		(.56)	%		N/A			N/A
Average full-time equivalent employees		1,222			1,228			1,233			1,310			1,309			(.5	)		(6.6	)
Equipment Finance
Total revenue (TE)	$	111		$	(696	)	$	98		$	184		$	138			N/M			(19.6)	%
Provision for loan losses		64			36			24			23			16			77.8	%		300.0
Noninterest expense		90			89			96			96			93			1.1			(3.2	)
Net (loss) income		(27	)		(513	)		(14	)		40			18			94.7			N/M
Average loans and leases		10,012			10,326			10,595			10,729			10,681			(3.0	)		(6.3	)
Average loans held for sale		49			51			32			15			6			(3.9	)		716.7
Average deposits		20			21			14			17			16			(4.8	)		25.0
Net loan charge-offs		32			28			24			18			16			14.3			100.0
Net loan charge-offs to average loans		1.27	%		1.09	%		.91	%		.67	%		.59	%		N/A			N/A
Nonperforming assets at period end	$	115		$	105		$	69		$	58		$	65			9.5			76.9
Return on average allocated equity		(11.99)	%		(225.99)	%		(6.11)	%		17.40	%		8.00	%		N/A			N/A
Average full-time equivalent employees		827			837			859			923			900			(1.2	)		(8.1	)
Institutional and Capital Markets
Total revenue (TE)	$	183		$	229		$	157		$	169		$	156			(20.1)	%		17.3	%
Provision for loan losses		16			36			16			15			(2	)		(55.6	)		N/M
Noninterest expense		107			128			102			115			105			(16.4	)		1.9
Net income		37			42			25			25			34			(11.9	)		8.8
Average loans and leases		8,364			7,898			7,633			7,219			6,716			5.9			24.5
Average loans held for sale		649			494			555			394			373			31.4			74.0
Average deposits		1,479			1,384			1,459			1,560			1,844			6.9			(19.8	)
Net loan (recoveries) charge-offs		(1	)		5			2			6			6			N/M			N/M
Net loan (recoveries) charge-offs to average loans		(.05)	%		.25	%		.11	%		.33	%		.35	%		N/A			N/A
Nonperforming assets at period end	$	58		$	26		$	12		$	15		$	17			123.1			241.2
Return on average allocated equity		11.47	%		13.48	%		8.29	%		8.50	%		12.55	%		N/A			N/A
Average full-time equivalent employees		975			931			938			979			1,019			4.7			(4.3	)
Consumer Finance
Total revenue (TE)	$	96		$	104		$	103		$	98		$	85			(7.7)	%		12.9	%
Provision for loan losses		171			171			84			19			12			—			N/M
Noninterest expense		56			52			49			59			41			7.7			36.6
(Loss) income from continuing operations		(83	)		(75	)		(19	)		10			20			(10.7	)		N/M
Net (loss) income		(83	)		(75	)		(19	)		13			6			(10.7	)		N/M
Average loans and leases a		12,252			12,567			9,437			9,089			8,722			(2.5	)		40.5
Average loans held for sale a		161			121			3,356			3,043			2,729			33.1			(94.1	)
Average deposits a		494			424			627			655			528			16.5			(6.4	)
Net loan charge-offs a		72			77			27			19			11			(6.5	)		554.5
Net loan charge-offs to average loans a		2.34	%		2.46	%		1.15	%		.83	%		.50	%		N/A			N/A
Nonperforming assets at period end	$	127		$	82		$	98		$	63		$	47			54.9			170.2
Return on average allocated equity a		(35.09)	%		(32.54)	%		(8.31)	%		4.59	%		9.87	%		N/A			N/A
Return on average allocated equity		(35.09	)		(32.54	)		(8.31	)		5.97			2.96			N/A			N/A
Average full-time equivalent employees		565			607			728			798			641			(6.9	)		(11.9	)

(a)  From continuing operations.

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

EX-99.2

Exhibit-99.2

Third Quarter 2008 Review October 21, 2008 Speakers: Henry Meyer Jeff Weeden

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management's current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key's control. Key's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. 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) continued disruption in the fixed income markets; (4) adverse capital markets conditions; (5) 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; (6) continued disruption in the housing markets and related conditions in the financial markets; (7) increased competitive pressure among financial services companies due to the recent consolidation of competing financial institutions and the conversion of certain investment banks to bank holding companies; (8) heightened legal standards and regulatory practices, requirements or expectations; (9) the inability to successfully execute strategic initiatives designed to grow revenues and/or manage expenses; (10) increased FDIC deposit premiums; (11) consummation of significant business combinations or divestitures; (12) operational or risk management failures due to technological or other factors; (13) changes in accounting or tax practices or requirements; (14) new legal obligations or liabilities or unfavorable resolution of litigation; and (15) disruption in the economy and general business climate as a result of terrorist activities or military actions. For additional information on the factors that could cause Key's actual results or financial condition to differ materially from those described in the forward-looking statements consult Key's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, and June 30, 2008, Annual Report on Form 10-K for the year ended December 31, 2007, and Current Reports on Form 8-K, filed with the Securities and Exchange Commission and available on the Securities and Exchange Commission's website (www.sec.gov). 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.

Strategic Update Strong reserves and capital Active risk management Continued focus on relationship businesses Strategic allocation of capital Exiting retail / floor plan lending for marine and RV Exiting private student lending

Improving Business Mix Austin Capital Mgmt Champion Mortgage Acquisitions Divestitures / Exit 2005 ORIX Servicing Portfolio Indirect auto business Malone Mortgage American Express Bus. Fin. Broker originated home equity EverTrust Sterling Branches American Capital Resources Tuition Mgmt Systems Announced (Exit): - Out-of-footprint homebuilder portfolio - Dealer orig. home improvement lending - Payroll Online services McDonald Investments branch network U.S.B. Holding Co. (UBH) Announced (Exit): - Direct and indirect retail and floor plan lending for marine and RV - Private student loan origination - In-footprint homebuilder portfolio

Financial Summary-3Q08 vs. 3Q07 Results from Continuing Operations (1) (1) Continuing Operations exclude the results of the Champion Mortgage finance business, which has been accounted for as a discontinued operation. (2) 9/30/08 ratio is estimated. GAAP = U.S. generally accepted accounting principles EPS (loss) - GAAP $(.10) vs. $.57 Return on Average Common Equity (2.36) % vs. 11.50 % Capital Ratios - Tangible Capital Ratio 6.95 % vs. 6.87 % - Tier 1 Capital Ratio (2) 8.48 % vs. 7.94 % - Total Capital Ratio (2) 12.31 % vs. 11.76 % Asset Quality - Net Charge-offs to Average Loans 1.43 % vs. .35 % - NPLs to EOP Loans 1.26 % vs. .72 % - NPAs to EOP Loans + OREO 1.61 % vs. .83 %

Significant Items Impacting 3Q08 Results $ in millions, except EPS

Realized and unrealized losses reduced the carrying balance by 9% during the 3rd quarter. Total cumulative loss recognized to date approximately 51% of original loan balances of $719 million. Will continue to work additional sales and foreclosure activities in the 4th quarter. The remaining $133 million of loans are carried as nonperforming assets at September 30, 2008. 3Q08 Update on Prior Disclosed Items Commercial Real Estate Loan Sale Leveraged Lease Update Key recorded $30 million additional income tax expense for the accrual of interest on disputed balances with the IRS during the 3rd quarter. Key opted-in to the IRS' global settlement initiative with respect to the disputed leveraged leases. Key expects to execute a closing agreement with the IRS as soon as the 4th quarter. As a result, Key should realize an after-tax recovery between $75 - $100 million related to interest on disputed tax balance. Key has dropped its appeal of the AWG decision.

Net Interest Margin (TE)-Continuing Ops. 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Net Interest Income 689 692 716 722 726 726 744 700 706 712 750 738.4 738 705 Net Interest Spread 0.0319 0.0309 0.0306 0.0305 0.0296 0.0285 0.0285 0.027 0.0262 0.0252 0.0275 0.0281 0.0288 0.0267 Net Interest Margin 0.0367 0.0363 0.0368 0.0372 0.0368 0.0361 0.0366 0.035 0.0346 0.034 0.0348 0.0329 0.0332 0.0313 Net Interest Income (1) Net Interest Margin (1) 0.0314 -0.0044 Net Interest Spread (1) 0.0265 -0.0086 (1) During the second quarter of 2008, Key's taxable-equivalent net interest income was reduced by $838 million as a result of an adverse federal court ruling on Key's tax treatment of a service contract lease transaction. Excluding this reduction, Key's taxable-equivalent net interest margin was 3.32%. During the first quarter of 2008, Key increased its tax reserves for certain lease in, lease out transactions and recalculated its lease income in accordance with prescribed accounting standards. These actions reduced Key's net interest income by $34 million. Excluding this reduction, the taxable-equivalent net interest margin was 3.29%. TE = Taxable Equivalent (1) (1) $ in millions

2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Average Loan Growth Adjusted for Union State Bank Acquisition 0.063 0.084 Average Loan Growth from Prior Year -0.0156 -0.0349 0.0815 0.0613 0.0483 0.054 0.0539 0.0516 0.034 0.0234 0.02157 0.03834 0.063 0.1065 0.1569 0.1256 $ in billions Commercial Consumer $47.6 17.6 Average Loans-Continuing Ops. $48.0 17.6 $48.3 17.4 $48.8 17.5 $49.7 18.0 $51.6 18.1 $54.2 18.5 $55.0 21.7 $54.5 21.7

$ in billions 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 CD's < $100 (K) 11.3 11.5 11.7 11.9 12.063 12.047 11.5 11.455 12.8 12.7 13.1 CDs > $100 (K) 5.5 6 6.2 6.2 6.3 6.9 8.1 8.7 9.5 CD's < $100 (K) 11.3 11.5 11.7 11.9 12.063 12.047 11.5 11.455 12.8 12.7 13.1 Average Core Deposit Growth Adjusted for Union State Bank Acquisition -0.01 0.00596 Average Core Deposit Growth Adjusted for McDonald Divestiture 0.0571 0.013 0.01 0.034 0.0222 0.0202 Average Deposit Growth from Prior Year 0.0997 0.1016 0.0843 0.0701 0.0154 -0.0027 0.0133 0.0061 0.0695 0.0742 0.0662 DDA NOW/MMDA Savings CDs < $100K CDs > $100K $13.1 25.2 1.7 11.7 5.5 $13.4 25.1 1.7 11.9 6.0 $13.2 23.4 1.6 12.1 6.2 $14.0 23.0 1.6 12.0 6.2 $14.4 24.2 1.6 11.5 6.3 $12.9 25.7 1.5 11.5 6.9 $10.7 27.0 1.9 12.7 8.1 Average Deposits-Continuing Ops. $10.6 27.2 1.8 12.7 8.7 $10.7 26.7 1.8 13.1 9.5 Excludes foreign deposits

Asset Quality $ in millions

Com'l Real Estate C&I and Lease Consumer Held for Sale OREO + Other $73 62 88 56 50 $58 60 97 3 55 $54 101 99 3 96 $64 117 95 4 98 $269 124 105 6 66 $456 112 119 25 52 $723 185 146 9 52 $363 316 135 342 54 Nonperforming Asset Trends 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 NPAs to Loans + OREO 0.0046 0.005 0.0041 0.0054 0.0057 0.0083 0.0108 0.0146 0.0159 0.0161 Peer Median S&P Regional & Diversified Bank Indices 0.0046 0.005 0.0049 0.0054 0.0066 0.0085 0.0105 0.0135 0.0165 OREO & Other 28 50 55 96 98 66 52 52 54 103 Held For Sale 1 56 3 3 4 6 25 9 342 169 Consumer 135 88 97 99 95 105 119 146 135 150 C&I 105 62 60 101 117 124 112 185 316 364 CRE 35 36 48 44 41 41 41 113 107 119 CRE - Construction 4 73 58 54 64 269 456 723 363 453 Total 308 329 273 353 378 570 764 1115 1210 1239 Peer Median S&P Regional & Diversified Bank Indices NPAs to Loans + OREO + Other NPAs $453 364 150 169 103 $ in millions

Commercial NPL Summary by Asset Size C&I CRE Lease 9 18 - - $68 165 - - 2 7 - - $38 133 - - 2 1 - - $67 40 - - <$5 million $5-$15 million $15-$25 million >$25 million 98.58% $ Amount $ Amount $ Amount # of Accounts # of Accounts # of Accounts $136 115 55 1,351 295 1,061 $ Amount # of Accounts Commercial and industrial nonperforming loans predominantly related to residential real estate and automobile floor plan lending Commercial real estate loans primarily related to residential properties segment Small ticket leases comprise the majority of the nonperforming lease portfolio NOTE: Percentages are based upon total commercial nonperforming loans of $817 million and total accounts of 2,746. $ # $ # $ # $ #

Credit Quality by Portfolio - 3Q08 (1) Net charge-off amounts annualized in calculation N/M = Not Meaningful * * $ in millions

Commercial Real Estate Loans (1) Segment NPLs are taken as a percentage of total Key NPLs. Total Key NPLs were $967 million at 9/30/2008. (2) Nonresidential land and development loans (3) NPLs, 90+ Days Past Due, and 30-89 Days Past Due are taken as a percentage of the respective total Key NPLs of $967 million, total Key 90+ Days Past Due amounts of $328 million, and total Key 30-89 Days Past Due amounts of $937 million at 9/30/2008. N/M = Not Meaningful September 30, 2008 $ in millions

Commercial Real Estate Residential Properties: $2.36 Billion

Peer Median 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Tangible Equity to Tangible Assets 0.0671 0.0668 0.0681 0.0701 0.0704 0.0697 0.0687 0.0658 0.0685 0.0698 0.0695 Peer-Tangible Equity to Tangible Assets 0.0586 0.0571 0.0623 0.0652 0.0608 0.057 0.057 0.0559 0.0568 0.059 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Tier 1 Risk-based Capital 0.0764 0.079 0.0802 0.0824 0.0815 0.0814 0.0794 0.0744 0.0833 0.0853 0.0848 Peer-Tier 1 Risk-based Capital 0.083 0.0826 0.0823 0.0849 0.0849 0.0812 0.0796 0.0751 0.0767 0.0837 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Total Capital 0.1191 0.1208 0.1213 0.1243 0.122 0.1215 0.1176 0.1138 0.1234 0.1241 0.1231 Peer Total Risk-based Capital 0.122 0.1172 0.1155 0.1123 0.1136 0.1223 Tangible Equity to Tangible Assets Tier 1 Capital Total Capital Capital Ratios Target Range 6.00% - 7.00% Target Range 7.50% - 8.50% Fed-defined minimum for a "well capitalized" bank (1) 3Q08 Tier 1 and Total Capital Ratios are estimated 6.00% 10.00% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Tier 1 Leverage 0.0917 0.0911 0.0896 0.0839 0.0915 0.0934 0.0946 Peer Total Risk-based Capital 0.0785 0.074 0.073 0.0687 0.0711 0.0772 Tier 1 Leverage Target Range 11.50% - 12.50% 5.00% (1) (1)

Appendix

Geographically Diverse Community Banking Great Lakes Core Deposits: 34% Commercial Loans: 31% Home Equity Loans: 29% Northwest Core Deposits: 23% Commercial Loans: 28% Home Equity Loans: 29% Rocky Mountains Core Deposits: 8% Commercial Loans: 13% Home Equity Loans: 14% Northeast Core Deposits: 31% Commercial Loans: 21% Home Equity Loans: 27% Note: Percentages are based on quarterly average balances and exclude core deposits, commercial loans and home equity loans centrally managed outside of the four community banking regions. Third Quarter 2008

Financial Summary TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable Community Banking $ in millions

Community Banking Line of Business Summary $ in millions TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable

National Banking Financial Summary $ in millions (1) From continuing operations TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable

National Banking Line of Business Summary TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable $ in millions

National Banking Line of Business Summary $ in millions (1) From continuing operations TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable

2000 2001 2002 2003 2004 2005 1Q06 2Q06 3Q06 4Q06 2006 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Servicing Portfolio 8.3 11 19.8 22.4 34.1 73.7 76.1 78.4 81.8 93.6 93.6 108.3 121.4 136.2 134.9 130.6 128.9 125 Average Escrow Deposits 0.125 0.303 0.411 0.558 0.832 1.23 2.135 2.386 2.494 3.053 2.52 3.279 3.924 4.57 4.3 4.1 3.9 3.6 Commercial Real Estate Servicing $ in billions Average Escrow Deposits Servicing Portfolio

Managing Through the Credit Cycle Commercial Portfolio C&I Portfolio Middle Market and Large Corporate portfolios are well-diversified, granular and performing as expected Modest deterioration in the Great Lakes Region Auto dealer floor plan showing increasing NPLs Commercial Real Estate Continuing to reduce exposures in the Residential Properties segment. Total balances down $1.3 billion from one year ago Continued progress on loan sales - held-for- sale portfolio reduced to $133 million Unfunded commitments on total nonowner- occupied CRE portfolio down $2.1 billion from one year ago to $3.9 billion Retail properties continuing to perform well Leasing New production volume down Small ticket leasing continuing to experience elevated levels of net charge-offs and delinquencies Consumer Portfolio Direct home equity loans continuing to perform well. 3Q08 net charge-offs at 0.36% Indirect Portfolios All portfolios in runoff at September 30, 2008 with the exception of Federal guaranteed student loans Expect to continue to experience elevated net charge-offs in all portfolios National Home Equity Marine Education

Average Loans $ in millions Continuing Operations

Home Equity Loans * Period End Balance, $ in millions September 30, 2008

Exit Portfolios $ in millions, period end data

Net Charge-Offs to Average Loans

Nonperforming Assets $ in millions (1) Primarily investments held by the Private Equity unit within Key's Real Estate Capital and Corporate Banking Services line of business. (2) During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs) from the loan portfolio to held-for-sale status.

NPLs to End of Period Loans N/M = Not Meaningful

EX-99.3

Exhibit 99.3 (1 of 2)

KeyCorp
Consolidated Balance Sheets
(dollars in millions)

	9-30-08			6-30-08			9-30-07
ASSETS
Loans	$	76,705		$	75,855		$	68,999
Loans held for sale		1,475			1,833			4,791
Securities available for sale		8,391			8,312			7,915
Held-to-maturity securities		28			25			36
Trading account assets		1,449			1,483			1,060
Short-term investments		653			826			528
Other investments		1,556			1,559			1,509
Total earning assets		90,257			89,893			84,838
Allowance for loan losses		(1,554	)		(1,421	)		(955	)
Cash and due from banks		1,937			1,912			2,016
Premises and equipment		801			748			631
Operating lease assets		1,030			1,089			1,135
Goodwill		1,595			1,598			1,202
Other intangible assets		135			146			105
Corporate-owned life insurance		2,940			2,917			2,845
Derivative assets		951			1,693			539
Accrued income and other assets		3,198			2,969			3,781
Total assets	$	101,290		$	101,544		$	96,137
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	25,789		$	27,278		$	24,198
Savings deposits		1,731			1,809			1,544
Certificates of deposit ($100,000 or more)		10,316			8,699			6,672
Other time deposits		13,929			12,541			11,403
Total interest-bearing deposits		51,765			50,327			43,817
Noninterest-bearing deposits		11,122			10,561			14,003
Deposits in foreign office — interest-bearing		1,791			3,508			5,894
Total deposits		64,678			64,396			63,714
Federal funds purchased and securities sold under repurchase agreements		1,799			2,088			5,398
Bank notes and other short-term borrowings		5,352			5,985			2,429
Derivative liabilities		589			637			218
Accrued expense and other liabilities		4,624			4,626			5,009
Long-term debt		15,597			15,106			11,549
Total liabilities		92,639			92,838			88,317
SHAREHOLDERS’ EQUITY
Preferred stock		658			650			—
Common shares		584			577			492
Capital surplus		2,552			2,544			1,617
Retained earnings		7,320			7,461			8,788
Treasury stock, at cost		(2,616	)		(2,675	)		(3,023	)
Accumulated other comprehensive income (loss)		153			149			(54	)
Total shareholders’ equity		8,651			8,706			7,820
Total liabilities and shareholders’ equity	$	101,290		$	101,544		$	96,137
Common shares outstanding (000)		494,765			485,662			388,708

Exhibit 99.3 (2 of 2)

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

	Three months ended									Nine months ended
	9-30-08			6-30-08			9-30-07			9-30-08			9-30-07
Interest income
Loans	$	1,066		$	717		$	1,209		$	2,906		$	3,546
Loans held for sale		21			20			91			128			248
Securities available for sale		110			111			106			330			312
Held-to-maturity securities		1			—			—			2			1
Trading account assets		16			10			11			39			26
Short-term investments		6			8			5			23			24
Other investments		12			14			12			38			40
Total interest income		1,232			880			1,434			3,466			4,197
Interest expense
Deposits		347			347			482			1,122			1,362
Federal funds purchased and securities sold under repurchase agreements		10			15			55			53			163
Bank notes and other short-term borrowings		34			27			30			100			59
Long-term debt		142			133			173			421			554
Total interest expense		533			522			740			1,696			2,138
Net interest income		699			358			694			1,770			2,059
Provision for loan losses		407			647			69			1,241			166
Net interest income (loss) after provision for loan losses		292			(289	)		625			529			1,893
Noninterest income
Trust and investment services income		133			138			119			400			359
Service charges on deposit accounts		94			93			88			275			247
Investment banking and capital markets (loss) income		(31	)		80			9			57			105
Operating lease income		69			68			70			206			200
Letter of credit and loan fees		53			51			51			141			134
Corporate-owned life insurance income		28			28			27			84			84
Electronic banking fees		27			27			25			78			74
Net (losses) gains from loan securitizations and sales		(30	)		33			(53	)		(98	)		(11	)
Net securities gains (losses)		1			(1	)		4			3			(41	)
Net (losses) gains from principal investing		(24	)		(14	)		9			(29	)		128
Gain from redemption of Visa Inc. shares		—			—			—			165			—
Gain from sale of McDonald Investments branch network		—			—			—			—			171
Other income		68			52			89			189			291
Total noninterest income		388			555			438			1,471			1,741
Noninterest expense
Personnel		381			404			383			1,194			1,222
Net occupancy		65			62			60			193			182
Computer processing		46			43			49			136			149
Operating lease expense		56			55			58			169			165
Professional fees		35			33			27			91			79
Equipment		23			23			22			70			71
Marketing		27			21			21			62			60
Other expense		129			140			133			360			424
Total noninterest expense		762			781			753			2,275			2,352
(Loss) income from continuing operations before income taxes		(82	)		(515	)		310			(275	)		1,282
Income taxes		(46	)		611			86			669			363
(Loss) income from continuing operations		(36	)		(1,126	)		224			(944	)		919
Loss from discontinued operations, net of taxes		—			—			(14	)		—			(25	)
Net (loss) income	$	(36	)	$	(1,126	)	$	210		$	(944	)	$	894
Net (loss) income applicable to common shares	$	(48	)	$	(1,126	)	$	210		$	(956	)	$	894
Per common share:
(Loss) income from continuing operations	$	(.10	)	$	(2.70	)	$	.58		$	(2.19	)	$	2.34
Net (loss) income		(.10	)		(2.70	)		.54			(2.19	)		2.28
Per common share — assuming dilution:
(Loss) income from continuing operations	$	(.10	)	$	(2.70	)	$	.57		$	(2.19	)	$	2.31
Net (loss) income		(.10	)		(2.70	)		.54			(2.19	)		2.25
Cash dividends declared per common share	$	.1875		$	.375		$	.365		$	.9375		$	1.095
Weighted-average common shares outstanding (000)		491,179			416,629			389,319			435,846			393,048
Weighted-average common shares and potential common shares outstanding (000)		491,179			416,629			393,164			435,846			397,816