Reprinted with permission of the Times Union
ALBANY – KeyBank on Thursday, February 11, said it would work with Governor Andrew Cuomo to address his concerns about its purchase of First Niagara Financial Group, a day after Mr. Cuomo said he opposed the merger and was lobbying to kill it.
Mr. Cuomo said last Wednesday that the $4.1 billion acquisition would have an adverse impact on the retail banking market in the Buffalo area as it would consolidate one third of all of the deposits there into the hands of just one bank.
First Niagara is based in Buffalo, an area where Mr. Cuomo has focused much of his upstate revitalization efforts.
“The consolidation is expected to result in thousands of lost jobs at the corporate and branch levels, with little hope these individuals will find alternative work in the retail banking field due to the oversaturated market conditions,” Mr. Cuomo said in a letter to several federal officials that he made public Wednesday. “In addition to the loss of jobs in local communities, consumers will face
further limitations on branch access. As it stands, tens of thousands of Buffalo area residents do not have access to reliable bank deposit services. Eliminating branches will only exacerbate the existing problem.”
The two companies also have overlapping branches in the Capital Region, where KeyBank has about 800 employees and 44 branches, while First Niagara has 500 employees and 31 branches.
About 40% of KeyBank’s local branches are within two miles of a First Niagara branch.
KeyBank’s roots are in the Capital Region, where it was founded in 1825. It moved its headquarters to Cleveland following the acquisition of Society Corp. there in 1993.
KeyBank said it continues to have a presence in New York, with more than 20% of its
employees and business based here.
“We wholeheartedly believe by further investing in New York we will increase our ability to better serve the people, businesses and communities of this state,” KeyBank said in a response to the governor’s concerns. “We look forward to working with Governor Cuomo and his staff to address their concerns and share our commitments.”
