Form 4: Bank of Nova Scotia Reduces KeyCorp Stake

Bank of Nova Scotia reported a disposition of 225,084 KeyCorp common shares at $20.22 per share, reducing its direct beneficial ownership to 161,968,762 shares.

Summary

• Bank of Nova Scotia, a 10% owner and deemed director of KeyCorp, reported a disposition of common shares.
• On December 16, 2025, 225,084 common shares were disposed of at a price of $20.22 per share.
• Following this transaction, Bank of Nova Scotia directly beneficially owns 161,968,762 KeyCorp common shares.
• The disposition was made pursuant to an Investment Agreement dated August 12, 2024, which includes provisions for pro rata participation in KeyCorp's share repurchases.

Sentiment

Score: 4

Explanation: The disposition of shares by a significant owner and deemed director is generally viewed as a negative signal, even if part of a pre-arranged agreement. While not catastrophic, it doesn't inspire immediate confidence.

Positives

• The disposition was part of a pre-existing Investment Agreement, suggesting a planned transaction rather than an abrupt sale.
• The Investment Agreement allows Bank of Nova Scotia to participate pro rata in KeyCorp's share repurchases, indicating a structured relationship.

Negatives

• Bank of Nova Scotia, a significant shareholder and deemed director, reduced its direct beneficial ownership in KeyCorp.
• The sale of 225,084 shares by a major insider could be perceived negatively by the market.

Risks

• A significant shareholder reducing its stake could be perceived negatively by the market, potentially signaling a lack of confidence or a strategic shift.
• The 'director-by-deputization' status implies influence, and a reduction in ownership might alter the dynamics of this influence.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from KeyCorp or Bank of Nova Scotia regarding future performance or strategy, beyond the ongoing nature of the Investment Agreement.

Management Comments

• Solely for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the Reporting Person may be deemed to be a director-by-deputization by virtue of the Reporting Person's contractual right to nominate directors to the board of directors of the Issuer pursuant to the Investment Agreement.

Industry Context

This insider transaction filing reflects a change in a significant shareholder's stake. In the banking sector, such transactions are closely watched for signals about a company's health or strategic direction, especially when involving a major financial institution like Bank of Nova Scotia and a regional bank like KeyCorp.

Comparison to Industry Standards

• This is a standard Form 4 filing for an insider transaction. There are no specific operational or financial results to compare to industry benchmarks or comparable companies in this context, as it is a disclosure of a specific transaction rather than performance metrics.

Management Changes

Corporate Governance

Related Party Transactions

• The disposition of shares is a transaction between Bank of Nova Scotia (a 10% owner and deemed director) and KeyCorp, governed by an Investment Agreement, which constitutes a related-party transaction.

Stakeholder Impact

• Shareholders: May interpret the disposition as a negative signal, potentially impacting share price.
• Management: The ongoing relationship and governance influence of Bank of Nova Scotia remain relevant due to the Investment Agreement.

Next Steps

• KeyCorp's ongoing share repurchase program, in which Bank of Nova Scotia participates pro rata, will continue to be relevant.
• Monitoring future Form 4 filings from Bank of Nova Scotia regarding its KeyCorp holdings.

Key Dates

Recommendation

The filing indicates a disposition of shares by a significant institutional investor and deemed director, Bank of Nova Scotia, which is generally a negative signal. However, the transaction is explicitly stated to be pursuant to a pre-existing Investment Agreement, suggesting a planned rather than reactive sale. Without additional context on KeyCorp's operational performance or broader market conditions, a 'hold' recommendation is prudent, advising investors to monitor future developments and KeyCorp's financial reports before making a definitive buy or sell decision. The remaining substantial beneficial ownership of 161,968,762 shares still signifies a significant stake.

Keywords

KeyCorp, Bank of Nova Scotia, KEY, SEC Form 4, beneficial ownership, share disposition, insider transaction, investment agreement, corporate governance, 10% owner