So, for our first regional bank presentation, as has been tradition over the last few years, we have Chris Gorman, Chairman and CEO KeyCorp. So, Chris, thank you so much for joining us.
So, check, check. So it's great to be here, and we always appreciate kind of kicking off your conference. It's a great conference, and we were just chatting. Ibrahim covers more companies, I think, than anybody on the planet, so hardest working man in finance. So it's nice to be with you.
Well, thank you. Thanks for the kind word. Jack of all trades, I guess, master of none. So I don't know if it was a backhanded compliment or,
It was a compliment.
But maybe just, Chris, I think it's been an eventful few years, right? Like, as we think about even going back to coming out of the COVID, just rates went up, you had the COVID shock, like, for the industry around interest rates. Just give us a mark-to-market in terms of the evolution of the KeyCorp franchise.
Sure.
Over the last three years, just, and how you're feeling about the business?
Yeah, so I'll start with the last piece of that. I'm feeling really good about our business. I think we're really, really well positioned. The reason I think we're so well positioned is you correctly point out, so the biggest hiking cycle in 60 years, that starts in 2022. In 2024, we raised capital. We raised $2.8 billion. We use about half of it, to reposition the balance sheet, which, by the way, we just reported to our board is more accretive than the day we announced it, that August 17th of 2024. That gave us really a lot of tailwinds, and that was really, really, that was important. What we talked about is pivoting to play offense, and I'm just so proud of the team and how they've done it.
So let's talk a little bit about 2025, and then I'll talk a little bit about why that gives me, you know, great feelings for the trajectory we carry into 2026. So in 2025, we grew PPNR by 44%. You know, you know that we had huge growth, like 23% NII, which is obviously helpful. We grew our fees by about 7.5%. So in investment banking, we had the second best year that we've ever had, and we weren't firing on all cylinders in that the M&A business. You read a lot about how M&A had a lot of momentum near the end of last year. That's true, but those were really large deals. And what's happened is now that's starting to trickle down into the middle market, which is really our space. And I'll give you a couple just data points on that.
We, last year, our M&A business was about 18% of our fee business there. Typically, M&A business would be, you know, kind of mid-20s. Typically, we do 30%-40% of our business with private equity shops. It was nowhere near that. So now all of a sudden, so fast. And then the other thing that I think is most important, as you think about kind of where we're positioned, is last year in 2025, we grew our commercial clients by 4%. You know, people talk about loans, they talk about deposits, they talk about fees. All that's important. But what I really care about is that we're constantly growing the number of clients that we have. Because with our model, we might raise capital for them, we might put it on our balance sheet, but actually growing clients is important.
On the consumer side, the consumer is very healthy. And, you know, I just listened with interest as Brian talked about it. Contrary to what you read, the consumer is extremely healthy. Kind of give you our non-interest-bearing accounts today have 25% more cash in them than they did pre-pandemic. So a lot of cash. The spend, we're seeing a 5% increase in spend. If you look at Zelle, ACH, et cetera, if you look at cards, it's about 3%. I think one of the things that a lot of these stats miss is just the wealth effect. So in the first 235 years of our country, there was $60 trillion in household wealth. Today, there's $200 trillion, which is hard to even fathom in a 15-year period.
And I think, obviously, that gives you, you can have a little bit of a dislocation between what's going on with, you know, with the labor market and what's going on with the economy. So getting back to, we go into 2026, after having a great year in 2025, we have more bankers than ever. You know, we talked about hiring 10% more bankers in each of our three fee areas, namely, mass affluent. I just touched on that a little bit, in our middle market with payments, 10%, and in our investment bank, 10%. So we hired all these folks, brought them online. Interestingly, they've been productive much more quickly than we would have imagined. I'll give you a statistic that surprised even me. 93% of the folks that we hired in payments and middle market actually closed a deal within the first three months of coming over.
That never used to happen. We always said we always have said it takes 12-18 months, and it, you know, there will be a burn-in period. But the point is, because we're out there recruiting and because it's an attractive platform for people, we're able to get people on the platform and we're able to hire people that are productive. Because obviously, if people are productive that quickly, it's really a function of their relationships, et cetera. So as we go into 2026, backlogs are at a record. Loan backlogs overall are up 20%. Middle market backlogs are up 50%. Our investment bank backlogs are up kind of mid-single digits, but that's off of, you know, a really strong number, obviously, that we had last year. We had $9 billion, by the way, of additional commitments that we put out in 2025.
I assume some of those will fund up. So you put all that together, and then you add the one other piece, I'd say, is, and you know this, we're very conservative from a credit perspective. I mean, the one thing that can derail the momentum for any bank is to have credit challenges. And on the consumer side, we have a super prime book. I think our average charge-offs for the last decade have been like 27 basis points. On the commercial side, because we distribute so much paper, we just don't carry a lot of risk. So that's kind of the lay of the land. Feel pretty good about where we are.
So that's a good overview. Thank you for that. So when we think about we came into this year, I think, when I talk to investors, I think there's this hope and expectation around broadening in domestic CapEx, the tax bill had incentives.
Yep.
Right until the end of the year, it felt like it was all on the come. Like everybody there were lots of conversations, but it wasn't quite materializing yet. Has that begun?
The answer is yes. So let me give you some numbers. And these are obviously, it's very early in the year, but as you look at from the end of the year to January, we grew loans by about $600 million, and we grew C&I by $900 million. So there is, in fact, momentum. And part of that is we're starting to see a little bit of growth in real estate, which we hadn't seen. And so, as we look forward, there's some headwinds and obviously some tailwinds, like any business. A couple of the headwinds would be our SFL business. We turned down more deals in the last quarter, in the last half of 2025, than we had anytime before in the 17 years we've been in the business. By the way, I think we've had one charge-off. We're very particular.
So there's a little slippage in structure there, and we're just not going to stretch. We don't have to. Some other things, there was a little bit of a pull forward in renewables and power, because there was a tax incentive to have it pulled forward into 2025. That grew 20%. So that's kind of. I'd put that in the headwinds category. In the tailwinds category, I already mentioned that we had all these commitments that we put in place last year. Those will fund up. I actually think the middle market is going to be a lot more active. We've had some public announcements, just deals we're advising on, these middle market public companies. You'll see some more traction there. And I really think one of the. That's one unlock. And another unlock is what's going on in real estate.
So you can imagine, look, the 10-year basically settled in. Pick your number. Is it four two? Is it four three? Is it four four? It doesn't much matter. What does matter in the real estate business is if the forwards are telling people that it's going to that the 10-year is going to go from 4.2 to 3.2, they won't transact. But now the bid and the ask are kind of coming together. There really hasn't been any transactional activity in real estate. There's been a lot of refinance, but there hasn't been transactional. So you put all that together. You know, I think it I think it could line up. Oh, you asked specifically about CapEx. There's 60%, 6.0% of our customers that we poll, say that the big, beautiful bill will be a benefit to them this year.
One of the benefits, if you have a small company, you can have the ability to immediately expense all the investment is quite a luxury. So, I'm optimistic on that front.
Got it. Just one on sort of the big picture CapEx stuff. We were doing a dinner last night, and I think it seems like the reshoring, manufacturing jobs coming back or projects starting is real. Would you agree with that? As opposed to, there's still a lot of policy uncertainty, nobody wants to make long-dated investments. Where do you settle on that sort of argument?
Well, I think there's some truth to both of those things. I don't think the reshoring has happened to the degree that I think that it will. I think that's just starting. And the other thing to keep in mind is part of the reshoring is out of China, out of Vietnam, into Mexico. It doesn't necessarily, you know, it doesn't necessarily go out of China to Miami, for example. So but I do think that there is some momentum there. So I, you know, I think it will happen. The other part of your question was, are people sort of over the policy uncertainty? I think they are. As I travel around and talk to all of our customers, look, Liberation Day was a shock to people. It caught people flat-footed. People didn't know how to react.
People didn't know what the secondary and tertiary impact of Liberation Day was going to be. I happened to be in a senator's office watching it on television with him when it was announced from the lawn of the White House. And it was, I mean, it was, but the people have worked through all that. You know, businesses are amazingly resilient, and also these things have a way of settling out. I don't see the macro angst, as I go out and travel around and talk to people today, that existed. You know, first, there was the actual election, so that was uncertainty, right? And then all of a sudden, there was a change in administration, which, you know, they always say people or policy. So that kind of was the sort of the first quarter.
And then kind of the peak of the uncertainty, I would say, was Liberation Day. And I think the uncertainty has dissipated.
Got it. And I guess.
Either that or we've just gotten used to the fact that there's going to be volatility and there's going to be uncertainty, which is part of it, too.
Just maybe going back to sort of loan growth, it sounds like signs of life on commercial real estate in terms of new production coming through. Even I think your implied C&I loan growth implies some slowdown year-over-year, but sounds like you could actually do better than that if things continue the way they've started.
Yeah, there's no question. Look, we do kind of a bottoms-up. Loan forecasting is a challenging thing. One, it has kind of short lead times. That's the first thing. The second thing, in our business model, we do what's right for the client. So when everything's kind of flashing green, we may be placing a lot of paper. As you know, we placed about $110 billion worth of paper. So all that being said, and we do try to be conservative. I think last year, at this time, we would have said our total commercial loans would grow 3%. They grew 5%. We would have said C&I would have grown something less than 9%. It grew 9%. So I just don't think there's you know, we'll update, Ibrahim, as the year goes on. But we're off to a very good start. And, you know, I feel good about it.
I think the other thing you mentioned, Chris, around just last year was a lot about large deals happening. Are we seeing that broadening out in the middle market in terms of what that means for your business?
Yes, we are. Yeah. It's two things. The private equity investors have been very quiet, unusually quiet for the last three years. Obviously, that sort of builds a backlog because there's an inverse relationship between the holding period and cash-on-cash return. That's building up. Just we're seeing, you know, more middle market deals, which are really our deals. So if you went to FactSet or something, you'd see that, you know, $1.5 billion deal, $2 billion deal. That's kind of our bread and butter, as opposed to some of the blockbuster deals that we all saw last year.
Are there any sectors that are particularly sort of in focus where you're seeing activity?
Well, I would say just activity in general, here's where we're seeing the most activity. One area is our power and renewables business. You know, there's a huge shortage of power in the United States, and that takes you know, whether it's the power generation, power distribution, you know, basically renewables, a lot of activity there, and we're a big player in that. Another area where I think there's a lot of activity and you're going to see more and more is in healthcare. Healthcare, the current structure of healthcare is rather unsustainable. We are a significant player in healthcare, and I think there's going to be significant additional significant consolidation because I think it just has to happen. And then the third area where we're seeing a lot of activity where we haven't seen much activity in the recent past is kind of just basic industrial businesses.
People kind of, you know, deciding that they want to get scale and, you know, we're having good strategic discussions there.
You've done a good job over the years, Chris, in terms of adding verticals within the investment banking business. When you look at the business today, are there any gaps where you would like to lift out a team or like do a tuck-in to sort of?
Well, so the answer is yes, and we're always out talking to people. And we're focused right now on, really, we have seven industry verticals, but there's a bunch of subverticals. And we're focused on strategically building out those. And then the other thing that, you know, to have an M&A business as big as we have, you have to have a little bit more global reach. And that's another thing we're thinking about.
Got it. Maybe just pivoting towards thinking about deposit growth.
Yes.
Just talk to us. I mean, I recall I think it was at the Investor Day many, many years ago, you talked about Key has an interesting branch footprint, right? You've got some Northwest presence, Midwest, Northeast. Just talk to us around how competitive it is. How are you going about just acquiring households and growing core deposits in this environment?
Sure. So I completely agree with you. You know, the crux of banking, these core deposits are very, very important. We have about $88 billion of kind of core retail deposits, and they're very good, very sticky deposits. And we do have kind of a bifurcated approach in that what goes on in the East for Key is we have many, many customers that have been with us for a very long time, very, very dedicated. People accumulate wealth over time, as I described earlier. And as a consequence, that's a huge opportunity for us in what we call our mass affluent. So we consider mass affluent to be $250,000-$2 million of investable assets. And these are people coming into our branch every day that have banked with us for 20 years, that know us, trust us, like us. And guess what?
They're being completely ignored. Wherever that money is, whether it's on a platform at Schwab or Fidelity, they're not getting any kind of personal attention because at $250,000-$2 million, you just don't get a lot of attention. Most of these customers, by the way, are older, and they actually really like attention. 70% of our AUM, which, by the way, is $70 billion, is in the East. So that's kind of the incredible and we're doing a great job of mining that. We have 3.5 million customers. We think 1 million of them have between $250,000 and $2 million to invest. We started really focusing on this group less than 24 months ago. We've grown our penetration and we've only penetrated 10%, but we've grown from 50,000-100,000 of the 1 million in the last 24 months. So great opportunity.
We've brought in $7 billion of deposits in AUM to Key. So that's sort of the eastern front. And then as you think about the Western side of our business and by the way, in the East, there's a ton of banks. There's 4,400 banks. There's a ton of credit unions, very competitive, et cetera. The West is a much better market. And it's a better market for a few reasons. We have 300 branches. 300 of our 950 branches are in the West. The West grows significantly faster in terms of new households than the East does. And the reason for that is there's a few things. One, there's in-migration, which is really, really important. If you look at income growth, income growth in places like Colorado and Utah and Washington and Oregon, significantly faster growth, like 10% faster wage growth than in other parts of the country.
So you have young people. You have in-migration. We have a great digital offering. And so that's why we're really focused out there. So as you see us repositioning branches, typically, it's out West. And so that'll be an area and by the way, the competitive landscape is, I think, much better. And I say much better. There's great competitors, including B of A, obviously, including Wells, including J.P. Morgan, including U.S. Bank. But the reality is those are very disciplined competitors.
Would you say Key has enough density in those markets to actually take advantage of the demographics?
Yes. I think with 300 branches, you know, I think we're in good stead. We've put in new branches in Utah and in Washington and in Colorado. But I don't really think if you have the right digital offering, but what you do have to have the branch has to be in the right place, and you have to have the right people. That's, frankly, more important than absolute branch density.
Got it. Maybe just wrapping up, it sounds like loan growth could be better than expected depending on how the year goes. Deposit growth, you talked about. When we look at the NII guidance, I think about 8%-10%. Just talk to us around the resiliency of that outlook, upside versus downside risks as we think of. Is it the market? Is the Fed funds rate? Like, what should we be thinking about here?
Sure. So we have to start with some of it is pretty mechanical. And the part that's pretty mechanical is we have $17 billion of low-yielding assets. That's just the roll-down of this year. So $17 billion rolls off. And by the way, there's another $17 billion that similarly rolls off in 2027. So $34 billion. So that's a pretty good tailwind. Like, that's 50% of the way there, kind of before you start. The other things that I think will be helpful is we obviously are, to your point, we're growing loans, which is helpful. We're out there, you know, we're out there managing expenses, et cetera, et cetera. What could hurt it is if all of a sudden it became very competitive to bid for deposits. My deposit assumptions is low 50s beta on the down as opposed to mid 50s beta on the upcycle.
So far, that hasn't been much of a challenge, but that could put it in jeopardy. The other thing that could happen is if you had either the curve inverts, which makes the reinvestment a little more challenging, or if the curve even just goes flat, that could put it at risk. But, you know, I feel really good about the trajectory of that interest income.
Understood. And maybe, Chris, pivoting maybe to the expense side, just talk to us. I mean, you've talked about tech spend, like the areas where the banks are really investing and how you think about operating leverage in that backdrop in terms of levers to control expenses in the world where revenue growth may not be as great as expected.
Sure. So we are investing heavily in our business. That's one of the things I'm most proud of. You started asking me kind of what's the state of Key right now. And we have been making significant investments throughout, and that's really important. You know, we've migrated. You know, all of our core systems are in the cloud. Every core system, with the exception of our deposit system, we've replaced since I became CEO. Half of our apps are all in the cloud. So we've been modernizing the place and investing heavily. The trajectory of our investment has been as follows. In 2024, we spent $800 million. Last year, we spent $900 million. This year, we're going to spend $1 billion. And when you ask me, like, where are we investing? We're investing in things like our wealth business to have an even better platform.
We're investing in APIs and our payments business, another area where we're investing. You'll see us investing significantly in AI. I'm a huge believer in AI, and we have kind of a top-down, bottoms-up approach. Top-down is we're looking at huge processes that stretch across the enterprise, and we're re-engineering those and applying technology. Think about commercial onboarding and servicing. That's a pain point for every bank. It takes too long to bring on a new client. It's the first experience a client experiences. We're completely looking at that process, and we've re-engineered it. Now we're applying technology. What you have to do is re-engineer it before you apply the technology. The next thing we're looking at is underwriting. You know, we underwrite in different areas. People have different approaches. In commercial underwriting, we're going to have one approach, and we're designing it end to end.
Now, on the bottoms-up way approach, there's a bunch of things you can do. Obviously, like everyone, we've used a lot of AI in our call centers to great effect. It's a better customer experience. And instead of costing $9 a call, it costs $0.25 a call. So that's good. One of the areas I'm really focused on right now is AML, BSA, KYC. We have over 500 people in those areas, and I think it lends itself very, very well to the use of technology. Now, you asked if, in fact, the revenues aren't there, what levers do we have to pull, which is fair. It's something we think about all the time. Just the way you should think about our business this year is we will grow our revenue twice as fast as we grow our expenses. So think about it as being a little bit elastic.
You know, right now, we've said we're going to grow revenues by 7%. That's kind of what we're targeting to grow. We will get that operating leverage. And part of it comes naturally to us because we have some important businesses, like our $70 billion of AUM. There's a lot of variable pay in that business, and there's a lot of variable pay in our 10% of our revenues, which is investment banking. So we naturally have a little more variability. And like anyone else, look, if we had to, we can pull whatever lever we need to. And, you know, if you're spending $1 billion on tech, you can certainly change the sequencing. There's a lot you can do.
When you put that together, Chris, when we think about the ROTCE target, I think 15% 2027, a bunch of your peers have talked about, like, even higher return on equity, sort of tangible equity target. Just give us a sense of, one, getting to that 15%. I think you've outlined kind of the case for how you get there. But then as we think from a medium-term perspective, is that the full potential of the franchise? Should this be earning a lot more higher returns, all else equal?
Yeah. So 15% is not the goal, but it's an important milepost on the journey. And so what we've said is that we'll be at 15% by 12/31/2027. But we also said that that assumed that we would have 10.3% marked CET1. And we've already said we're going to burn that down to the top end of our range, which is 9.5%-10%. So my message is if we're not going to have 10.3% marked CET1, we'll either get there sooner or at 12/31/2027, we'll have more than 15% return on tangible common equity. The long-term goal that we've laid out is 16%-19%. And I think based on the trajectory we're on and the levers we have and the fact that we've announced that we're going to buy back $300 million because obviously, that's a big factor. We're going to buy back $300 million per quarter.
You know, I think we'll be able to, you know, we'll update everyone once we hit the 15%. But it's not the goal. As I said, it's a milepost.
Got it. You mentioned, and I'm not sure if it's related or not, but I saw one of your LinkedIn posts. I think you were with a member of the Scotiabank doing a fireside in Canada recently. Just talk to us about that investment. I think it was unique for those of us who followed regional banks for a long time. Started out as a financial investment. Like, is there more to do there strategically or internationally, as you alluded to?
Yeah. So first of all, I do think it was a very unique financing. You know, and I thought for us, it was really important. And we've talked a lot about all the momentum we have and how front-footed we are. And that enabled us to be front-footed faster than we otherwise would have been. So I'm really pleased that we did it. So that's the first thing. Second thing is it's a financial investment for Scotia. And, you know, this investment is actually in their, I call it the SI bucket, where you basically get very favorable capital treatment. So the returns on their investments have been phenomenal. Last year, our TSR was 26%. For the last two years, it's been 58%. So in and of itself, I think it's been a great investment.
We haven't really unlocked what I think we can do together. Part of it is because it is a financial investment. We haven't, you know, we just haven't spent time doing it. But as you correctly point out that you saw in the LinkedIn post, I was up in Canada as recently as last week. I do think there are things we can do. So we talk about you asked about reshoring. If reshoring goes to Mexico, we have absolutely no presence in Mexico. Scotiabank has a significant presence in Mexico. So think about that. Think about moving money around the globe. Obviously, Scotia has that in place. We're never going to invest the money to basically have the piping around the globe. That wouldn't make any sense for us. Makes a lot of sense for us to partner.
Our integrated corporate and investment bank focused on certain sectors and certain companies, I think, can be really helpful to them on a variety of fronts as they think about things. So I can't tell you that we've gotten. We didn't plan for any synergies, and we haven't gotten any yet to speak of. But I do think there's a lot we can do together. And I think that was one of the reasons I went up to see Scott and the team last week. I just want to keep it front and center for people.
Got it.
They've been a great partner, by the way.
I guess the message is stay tuned, more to come.
Yeah. Yeah.
Maybe just for the time we have left, Chris, one, I think you've been in the industry for a long time. When we think about the regulatory changes that are underway, be it from capital requirements, liquidity requirements, to supervision that Brian talked about earlier, just give us a sense of, like, what's changed for Key?
Yeah.
What do you expect from the regulators over the coming months and next year that could maybe cause you to run the business differently?
I'm not sure that we would, well, run the business differently. But what I think Brian did a good job of walking the group through. I think if you're not in the business, you don't have an appreciation for the amount of time that has been spent with regulators on documentation, process, procedures. I am all for safety and soundness. Safety and soundness is earnings. It's capital, and it's liquidity. And I'm completely on board for all of that. But what happened since the global financial crisis for example, last night, we had a dinner, and Ken Gavrity joined me, who runs our payments and middle market business. And he shared with the group at dinner that his group alone had 30 reviews by regulators last year. And of course, that means our internal audit folks have to review the review, right?
And so 30 becomes 60. And so if you think about if you think about the pre-planning meeting of basically what's an audit, the actual audit and the post-audit, I mean, it's pretty shocking. And so my message to everyone is the free-up of time and bandwidth of the management teams is I can't quantify it's easy to quantify how much capital you have to have or what the liquidity is of this or that. What I can't quantify for people, but it is absolutely the biggest benefit, is just getting rid of the duplicative I'll give you an example. I think cyber risk is the number one risk to the United States. I think it's the number one risk to the financial services industry. And I think it's the number one risk to Key.
Having said all that, what I don't think we need are a bunch of consecutive audits on cyber covering the exact same thing. And, you know, to Miki Bowman's credit and to Jonathan Gould's credit, the changes in terms of coordinating these exams is really, really favorable. And so the other things, if you think about liquidity assumptions, if you think about capital, if you think about dynamic stress testing, we already do that anyway. So as the Basel III Endgame gets rolled out, I'm not that focused. But I'm very, very optimistic about the time dividend of not doing things that are duplicative.
Got it. I guess two more things, Chris. One, obviously, there's a lot of optimism around most things with regards to the economy. Just touch upon credit quality. Anything to worry about? Like, what could go wrong? Are there any areas of stress even today that you're looking at within your portfolio or in.
Well, when you're renting out dollars and getting paid pennies, a lot can go wrong. So you've got to be really careful. Seriously, you've got to be. I mean, that's how, as banks, the thing that can derail this is doing silly credit deals. And we just won't do it. As we think about our portfolio, there's a few places where I always focus. And the first thing is any place there's leverage. Leverage cuts both ways. Our leveraged finance book is $2 billion, which is virtually nothing. And it was that size when we were half the size that we are now. So leveraged finance is one place you always look. I mentioned health care. Health care is a place that I keep my eye on. I said there had to be consolidation because I didn't think that was sustainable the way it is.
And so I think health care is an area where, you know, I keep a close eye on that. And then there's always little idiosyncratic things. For example, we have an ag business that's in Eastern Washington. And it makes mostly cherries and apples, if you're interested. And they're having some of those companies are having trouble right now. And the reason they're having trouble is they can't get any labor. So you always have these little idiosyncratic things. But stepping back for a minute and kind of opening up the aperture, I feel really good about our credit by every metric. If you look at delinquencies, if you look at criticized, if you look at classified, we are on a steady improvement path to improvement.
I will tell you this, you know, we've had a lot of kind of, you know, in terms of building our reserves, we've had, you know, a little bit of qualitative build when there was the uncertainty around that we talked about earlier. I think as we look at our reserves, probably if we were going to say they're under or over, we'd probably say we're probably a little over where we need to be.
I think the one thing on credit with the markets woken up to AI disruption risk over the last 10 days, be it the software sector, business services, like, is that something that you all now actively incorporate in the credit review underwriting process to figure out which of your clients could get disrupted by AI?
First, let me talk about our credit book. Then I'll talk about what's happened in the market over the last few days, which I don't think makes a lot of sense, just candidly. But, you know, we have great data. For example, as soon as the trade came on that AI, this was the Anthropic Claude announcement, you know, that AI wins and software as a service is definitely going to be annihilated, immediately able to go through our databases. We have less than $300 million of exposure to software companies. Think about software companies is there's not a lot of debt out there because software companies are inherently profitable. They throw off a lot of cash. And so they either don't borrow, or if they do borrow, that's not appealing to us. We don't lend them money.
So I'm not from Key's perspective. I'm not. Oh, and by the way, technology is 10%. It's not like it's nothing, but it's 10% of our investment banking fees, just from a perspective.
OK.
Now, as it relates to kind of how the market I guess today in the crosshairs. I haven't looked at my screen, but I guess Moody's is in the crosshairs and a few others today. Yesterday, it was the insurance companies last week. But I mean, I am a huge believer in AI. We are investing heavily in AI. I spend a lot of time with my management team every single month going over all the opportunities. But, and I'm a huge believer. But it's not going to happen overnight. For example, the biggest companies, yes, they might develop their own CRM. But it's not like every company all these middle market companies that, say, are on Salesforce. I'll just make it up. And I'm not promoting one platform over another. But the reality is those can't really be replaced overnight.
A lot of the AI that people are going to apply is going to come through the software that they're running. So I guess my whole point is, is it is AI a game changer? Absolutely. Am I a huge believer in it? A huge believer in it? I certainly am. But I think some of the market reactions that I've seen in the last week seem a little excessive.
Got it. One last question. So I think you've been very clear recently around not having a high degree of interest in bank M&A. But just talk to us about as you watch the industry, you're seeing consolidation take place in front of our eyes. Like, when you look at that, do you think it becomes a competitive disadvantage for Key to not being able to engage? Or does the disruption create opportunities to hire bankers, pick up relationships, which tends to happen post-mergers?
Yeah. No, I don't feel like, look, there's 4,400 banks. I don't feel like we're missing out on anything. I really don't. What's been the anomaly was really not what's currently going on. The anomaly was what went on for, like, the four years in the Biden administration when there just wasn't any transactional activity at all, right? It's very unusual for there to be 4,400 market participants, and there's no consolidation. This is a sea change that will go on for a long time. I certainly don't think we're missing it. We have an incredible organic opportunity. I want everyone in our organization focused on that organic opportunity. So I don't feel like I'm missing out. I don't think we'll be disadvantaged at all. I think the greatest way for us to create value is to drive organic growth.
I do think and you'll see it play out you know, the opportunity for disruption is huge. When there's a lot of activity out there, there's a lot of dislocation. And you can pick up the dislocation for free as opposed to paying a huge premium for it.
Got it. On that note, Chris, thank you so much for your time this morning.
Thank you. I appreciate it.