• HoldCo urges KeyBank to fire CEO Chris Gorman and ban acquisitions
• Investor accuses Gorman of conflicting statements on mergers
• Claims mixed signals contributed to a fall in KeyBank’s share price
• Questions Scotiabank’s role and hints at a stealth takeover
• Argues shareholders want either a sale or aggressive buybacks
• Says weak capital strategy forced KeyBank toward the Scotia deal
• Calls for independent oversight of capital allocation
• KeyBank has not yet responded to the presentation

HoldCo Asset Management escalated its activist campaign Friday with a sharp call for KeyBank to dismiss CEO Chris Gorman and institute a strict ban on acquisitions, arguing that inconsistent strategy and poor capital management have undermined shareholder value.

In a 57 page presentation, the investor accused Gorman of mixed messaging on mergers and acquisitions, arguing that his public comments created confusion over whether the Cleveland based lender intends to pursue deals. 

HoldCo said Gorman has repeatedly downplayed the importance of acquisitions this year, highlighting five occasions on which either he or CFO Clark Khayat signalled that mergers are not central to KeyBank’s strategy.

During the bank’s third quarter earnings call in October, Gorman said M and A ranked far down the list of capital priorities. 

Similar remarks surfaced earlier in the year, when he noted that the bank was focused on organic growth and that acquisitions were not a priority.

HoldCo argued those comments contradicted how Bloomberg interpreted a separate interview in November, in which Gorman praised the Pacific Northwest as a rational market. 

The article framed the remarks as evidence of expansion interest, and HoldCo claimed the perceived shift caused KeyBank shares to fall 1.6 percent on the day of publication.

The activist investor also questioned the intentions of Scotiabank, which last year acquired nearly 15 percent of KeyBank’s shares. 

While the Canadian lender described the position as a passive investment, HoldCo suggested the language used around partnership and strategic alignment resembled a covert move toward control. 

It said the arrangement looked like a stealth acquisition and could lead to KeyBank being used as a United States outpost.

HoldCo owns roughly 142 million dollars in KeyBank stock, representing 0.7 percent of the bank. Yet its influence has grown after a series of high profile interventions, including its demand this summer that Dallas based Comerica sell itself. 

Comerica ultimately agreed to a 10.9 billion dollar sale to Fifth Third in October, though HoldCo criticised the deal as rushed and filed suit against both banks.

In the case of KeyBank, HoldCo argued the lender has been partially steered by Scotiabank and that shareholders would be better served either by a sale to a larger bank such as PNC or Wells Fargo, or by a renewed commitment to buybacks and capital returns. 

It suggested that weakness in capital management had forced KeyBank toward the Scotiabank tie up.

HoldCo’s presentation cited past acquisition history to argue against future deals. It noted that KeyBank’s 4.1 billion dollar purchase of First Niagara in 2015 came after the bank had signalled little interest in acquisitions. 

Gorman, then the designated merger integration executive, played a key role in that transaction.

The activist investor called for the creation of an independent capital allocation committee without representatives from Scotiabank and urged KeyBank to deploy all excess capital into buybacks after supporting organic growth.

KeyBank has not responded publicly to the allegations. Gorman is scheduled to speak Tuesday at the Goldman Sachs Financial Services Conference, where analysts may press him to address HoldCo’s claims.