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Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Values, Volume of Activity and Gain (Loss) Information Related to Derivative Instruments

The following table summarizes the fair values of our derivative instruments on a gross and net basis as of December 31, 2023, and December 31, 2022. The change in the notional amounts of these derivatives by type from December 31, 2022, to December 31, 2023, indicates the volume of our derivative transaction activity during 2023. The notional amounts are not affected by bilateral collateral and master netting agreements. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Where master netting agreements are not in effect or are not enforceable under bankruptcy laws, we do not adjust those derivative assets and liabilities with counterparties. Securities collateral related to legally enforceable master netting agreements is not offset on the balance sheet. Our derivative instruments are included in “accrued income and other assets” or “accrued expenses and other liabilities” on the Consolidated Balance Sheets, as indicated in the following table:

			December 31, 2023												December 31, 2022
						Fair Value (a)												Fair Value (a)
Dollars in millions			Notional Amount			Derivative Assets			Derivative Liabilities						Notional Amount			Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate			$	44,621		$	39		$	12					$	41,200		$	114		$	3
Derivatives not designated as hedging instruments:
Interest rate			78,051			134			973						80,772			189			1,304
Foreign exchange			6,034			89			73						9,507			136			131
Commodity			11,611			721			698						16,176			1,328			1,304
Credit			121			—			1						95			1			3
Other (b)			2,683			16			20						940			13			5
Total derivatives not designated as hedging instruments:			98,500			960			1,765						107,490			1,667			2,747
Total			143,121			999			1,777						148,690			1,781			2,750
Netting adjustments (c)			—			(818)			(473)						—			(757)			(1,262)
Net derivatives in the balance sheet			143,121			181			1,304						148,690			1,024			1,488
Other collateral (d)			—			(1)			(18)						—			—			(5)
Net derivative amounts			$	143,121		$	180		$	1,286					$	148,690		$	1,024		$	1,483

(a)We take into account bilateral collateral and master netting agreements that allow us to settle all derivative contracts held with a single counterparty on a net basis, and to offset the net derivative position with the related cash collateral when recognizing derivative assets and liabilities. As a result, we could have derivative contracts with negative fair values included in derivative assets and contracts with positive fair values included in derivative liabilities.

(b)Other derivatives include interest rate lock commitments related to our residential mortgage banking activities, forward sales commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when-issued securities, and other customized derivative contracts.

(c)Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. As of December 31, 2023, excess collateral that has not been offset against net derivative instrument positions totaled $161 million of cash collateral and $269 million of securities collateral posted as well as $16 million of cash collateral and $212 million of securities collateral held.

(d)Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

Schedule of Pre-Tax Net Gains (Losses) on Fair Value Hedges

The following tables summarize the amounts that were recorded on the balance sheet as of December 31, 2023 and December 31, 2022, related to cumulative basis adjustments for fair value hedges.

			December 31, 2023
Dollars in millions			Balance sheet line item in which the hedge item is included			Carrying amount of hedged item(a)			Hedge accounting basis adjustment
Interest rate contracts			Long-term debt(b)			$	9,919		$	(437)
Interest rate contracts			Securities available for sale(c)			8,655			(152)

			December 31, 2022
Dollars in millions			Balance sheet line item in which the hedge item is included			Carrying amount of hedged item (a)			Hedge accounting basis adjustment
Interest rate contracts			Long-term debt(b)			$	10,411		$	(552)
Interest rate contracts			Securities available for sale(c)			405			48

(a)The carrying amount represents the portion of the asset or liability designated as the hedged item.

(b)Basis adjustments related to de-designated hedges that no longer qualify as fair value hedges reduced the hedge accounting basis adjustment by $5 million and $6 million at December 31, 2023 and December 31, 2022, respectively.

(c)Certain amounts are designed as fair value hedges under the portfolio layer method. The carrying amount represents the amortized costs basis of the prepayable financial assets used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the relationship. At December 31, 2023 and December 31, 2022, the

amortized cost of the closed portfolios used in these hedging relationships was $13 billion and $708 million, respectively, of which $7 billion and $405 million were designated in a portfolio layer hedging relationship. At December 31, 2023 and December 31, 2022, the cumulative basis adjustments associated with these amounts totaled $(147) million and $48 million.

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following tables summarize the effect of fair value and cash flow hedge accounting on the income statement for the years ended December 31, 2023, December 31, 2022, and December 31, 2021.

			Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
Dollars in millions			Interest expense – long-term debt			Interest income – loans			Interest Income - securities			Investment banking and debt placement fees
Twelve Months Ended December 31, 2023
Total amounts presented in the consolidated statement of income			$	(1,305)		$	6,219		$	793		$	542
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items			(119)			—			181			—
Recognized on derivatives designated as hedging instruments			(135)			—			(132)			—
Net income (expense) recognized on fair value hedges			$	(254)		$	—		$	49		$	—
Net gain (loss) on cash flow hedging relationships
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
Interest contracts			$	(2)		$	(956)		$	—		$	5
Net income (expense) recognized on cash flow hedges			$	(2)		$	(956)		$	—		$	5
Twelve Months Ended December 31, 2022
Total amounts presented in the consolidated statement of income			$	(475)		$	4,241		$	752		$	638
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items			690			—			(339)			—
Recognized on derivatives designated as hedging instruments			(697)			—			350			—
Net income (expense) recognized on fair value hedges			$	(7)		$	—		$	11		$	—
Net gain (loss) on cash flow hedging relationships
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
Interest contracts			$	(3)		$	(146)		$	—		$	9
Net income (expense) recognized on cash flow hedges			$	(3)		$	(146)		$	—		$	9
Twelve Months Ended December 31, 2021
Total amounts presented in the consolidated statement of income			$	(221)		$	3,532		$	546		$	937
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items			276			—			(113)			—
Recognized on derivatives designated as hedging instruments			(150)			—			113			—
Net income (expense) recognized on fair value hedges			$	126		$	—		$	—		$	—
Net gain (loss) on cash flow hedging relationships
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
Interest contracts			$	(4)		$	329		$	—		$	4
Net income (expense) recognized on cash flow hedges			$	(4)		$	329		$	—		$	4

Schedule of Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location

The following table summarizes the pre-tax net gains (losses) on our cash flow hedges for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, and where they are recorded on the income statement. The table includes net gains (losses) recognized in OCI during the period and net gains (losses) reclassified from AOCI into income during the current period.

Dollars in millions			Net Gains (Losses) Recognized in OCI			Income Statement Location of Net Gains (Losses) Reclassified From OCI Into Income			Net Gains (Losses) Reclassified From OCI Into Income
Twelve Months Ended December 31, 2023
Cash Flow Hedges
Interest rate			$	(294)		Interest income — Loans			$	(956)
Interest rate			—			Interest expense — Long-term debt			(2)
Interest rate			5			Investment banking and debt placement fees			5
Total			$	(289)					$	(953)
Twelve Months Ended December 31, 2022
Cash Flow Hedges
Interest rate			$	(1,660)		Interest income — Loans			$	(146)
Interest rate			7			Interest expense — Long-term debt			(3)
Interest rate			11			Investment banking and debt placement fees			9
Total			$	(1,642)					$	(140)
Twelve Months Ended December 31, 2021
Cash Flow Hedges
Interest rate			$	(307)		Interest income — Loans			$	329
Interest rate			2			Interest expense — Long-term debt			(4)
Interest rate			10			Investment banking and debt placement fees			4
Total			$	(295)					$	329

Schedule of Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments

The following table summarizes the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, and where they are recorded on the income statement.

			2023															2022															2021
Year ended December 31, Dollars in millions			Corporate services income			Consumer mortgage income			Other income			Total						Corporate services income			Consumer mortgage income			Other income			Total						Corporate services income			Consumer mortgage income			Other income			Total
NET GAINS (LOSSES)
Interest rate			$	41		$	—		$	—		$	41					$	57		$	—		$	6		$	63					$	30		$	—		$	2		$	32
Foreign exchange			50			—			—			50						52			—			—			52						47			—			—			47
Commodity			22			—			—			22						23			—			—			23						14			—			—			14
Credit			2			—			(52)			(50)						(1)			—			(39)			(40)						4			—			(36)			(32)
Other			—			(1)			(6)			(7)						—			4			(2)			2						—			13			(7)			6
Total net gains (losses)			$	115		$	(1)		$	(58)		$	56					$	131		$	4		$	(35)		$	100					$	95		$	13		$	(41)		$	67

Schedule of Fair Value of Derivative Assets by Type

The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our net exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.

December 31, Dollars in millions			2023			2022
Interest rate			$	123		$	136
Foreign exchange			42			67
Commodity			409			820
Credit			—			—
Other			15			11
Derivative assets before collateral			589			1,034
Plus (Less): Related collateral			(408)			(10)
Total derivative assets			$	181		$	1,024

Schedule of Credit Derivatives Sold and Held

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at December 31, 2023, and December 31, 2022. The notional amount represents the amount that the seller could be required to pay. The payment/performance risk shown in the table represents a weighted average of the default probabilities for all reference entities in the respective portfolios. These default probabilities are implied from observed credit indices in the credit default swap market, which are mapped to reference entities based on Key’s internal risk rating. 

			2023												2022
December 31, Dollars in millions			Notional Amount			Average Term (Years)			Payment / Performance Risk						Notional Amount			Average Term (Years)			Payment / Performance Risk
Other			$	4		10.69			4.86		%				$	1		15.17			5.10		%
Total credit derivatives sold			$	4		—			—						$	1		—			—

Schedule of Credit Risk Contingent Feature

Refer to the table below for the aggregate fair value of all derivative contracts with credit risk contingent features held by KeyBank that were in a net liability position.

Dollars in millions			December 31, 2023						December 31, 2022
Net derivative liabilities with credit-risk contingent features			$	(45)					$	(612)
Collateral posted			42						534

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