Two Bank Stocks Set to Shine in 2025: KeyCorp and Huntington Bancshares

As we look ahead to 2025, investors are eager to identify stocks that have the potential to outperform the broader market. Two regional bank stocks, KeyCorp (KEY) and Huntington Bancshares (HBAN), stand out as promising candidates for significant improvement in the coming year. Let's explore the factors contributing to their expected growth and compare their strategies and performance with their peers.

1. KeyCorp (KEY):
- Potential Merger Target: KeyCorp has received additional investment from Bank of Nova Scotia (Scotiabank), which could make it a merger target. This could drive the stock price higher, as seen in the past with other merger targets. (Source: "KeyCorp Is Likely to Move Higher as a Merger Target")
- High Dividend Yield: KEY stock offers a high dividend yield of 4.53%, which is attractive to income-seeking investors. This could drive demand for the stock and potentially increase its price. (Source: "Should you invest $1,000 in KeyCorp right now?")

2. Huntington Bancshares (HBAN):
- Optimistic Analyst Ratings: Analysts at JPMorgan Chase have a bullish outlook on HBAN, expecting the bank's earnings to grow 6% above estimates in 2025. This positive sentiment could drive investor demand for the stock. (Source: "Huntington Bancshares Has Room to Move Higher")
- Deposit Mix and Strategic Focus: HBAN has been focusing on commercial deposits and strategic growth in money market accounts over certificates of deposit (CDs). This strategic shift could lead to improved earnings and increased investor interest in the stock. (Source: "Huntington Bancshares Has Room to Move Higher")



In comparison to their peers, KeyCorp and Huntington Bancshares have shown strong performance and have implemented effective strategies to navigate the challenging economic environment. Their geographical diversification, strong financial performance, and effective cost management have contributed to their success. However, it is essential to consider the specific risks and uncertainties associated with each bank when making investment decisions.

Regulatory changes and economic conditions play a significant role in the potential growth of bank stocks, particularly regional banks. The relaxation of Basil III regulations could make regional banks more attractive, as seen in the case of KeyCorp, which has rallied in 2024 on hopes of being a merger target due to its improved regulatory outlook. Additionally, the economic conditions, such as interest rates and credit quality, could impact the performance of these banks.

In conclusion, KeyCorp and Huntington Bancshares are two regional bank stocks that stand out for improvement in 2025. Their potential as merger targets, high dividend yields, optimistic analyst ratings, and strategic focus on deposit mix make them attractive investment options. As always, investors should conduct thorough research and consider their risk tolerance before making any investment decisions.