Form 4: Bank of Nova Scotia Trims KeyCorp Stake

Bank of Nova Scotia, a 10% owner and director-by-deputization, sold 100,316 KeyCorp common shares for $18.86 each, as part of a pre-arranged investment agreement.

Summary

• Bank of Nova Scotia, a 10% owner and director-by-deputization of KeyCorp, reported the disposition of common shares.
• On December 9, 2025, 100,316 common shares were sold at a price of $18.86 per share.
• The transaction was made pursuant to an Investment Agreement dated August 12, 2024, between Bank of Nova Scotia and KeyCorp.
• This agreement allows Bank of Nova Scotia to participate pro rata in any share repurchases by KeyCorp.
• Following this transaction, Bank of Nova Scotia directly beneficially owns 162,193,846 KeyCorp common shares.

Sentiment

Score: 5

Explanation: The transaction is neutral as it is a pre-arranged disposition by a significant shareholder, likely tied to the issuer's share repurchase program, rather than a discretionary sale based on new information or a change in sentiment.

Positives

• The transaction was executed under a pre-arranged Rule 10b5-1 plan and an Investment Agreement, indicating a structured and expected event rather than an abrupt change in sentiment.
• The disposition is linked to KeyCorp's share repurchase program, which can be a positive signal for the issuer's capital management.

Negatives

• A significant shareholder reducing its stake, even if pre-arranged, could be perceived as a slight negative signal regarding future growth prospects or valuation, though the context of a repurchase program mitigates this.

Future Outlook

NA

Industry Context

This transaction represents a routine insider filing for a major financial institution (Bank of Nova Scotia) reducing its stake in another financial institution (KeyCorp). Such dispositions, especially when pre-arranged and tied to share repurchase programs, are common in the banking sector for managing strategic investments and capital allocation.

Corporate Governance

Related Party Transactions

• The disposition of shares by Bank of Nova Scotia, a 10% owner and director-by-deputization, to KeyCorp (implied by the link to KeyCorp's repurchase program) constitutes a related party transaction.

Stakeholder Impact

• Shareholders: A minor reduction in Bank of Nova Scotia's stake, potentially offset by KeyCorp's share repurchase program which can be accretive to earnings per share for remaining shareholders.
• Management: The transaction aligns with the terms of the Investment Agreement and KeyCorp's capital management strategy.

Key Dates

Recommendation

This Form 4 filing reports a pre-arranged insider transaction by a significant shareholder, Bank of Nova Scotia, reducing its stake in KeyCorp. The sale is linked to KeyCorp's share repurchase program and a prior Investment Agreement, suggesting it is an expected event rather than a signal of new negative sentiment. As such, this single transaction does not provide sufficient new information to warrant a change in investment recommendation for KeyCorp, hence a 'hold' is appropriate.

Keywords

KeyCorp, Bank of Nova Scotia, Form 4, Insider Transaction, Share Disposition, 10% Owner, Director-by-Deputization, Rule 10b5-1, Investment Agreement, Share Repurchase