Keycorp CEO Chris Gorman says clients are optimistic despite tariffs uncertainty

Adds Gorman comments on regulation, M&A, file photo of Gorman

NEW YORK, Feb 11 (Reuters) - Keycorp CEO Chris Gorman said the bank's clients remain optimistic, despite the uncertainty created by new import tariffs.

"I do think tariffs are inflationary, and create some uncertainty", Gorman said during a financial services conference on Tuesday.

But Gorman added that the tariffs currently in place are similar to the ones the U.S. has already adopted before and "lived through." On the short term, tariffs may even increase demand for loans as companies buy more to avoid future new tariffs.

The Keycorp CEO said a survey with clients showed that many are optimistic and 62% expect to work on strategic M&A over the next year.

Gorman said there have been good regulatory changes, such as the new protocol for the stress tests, that he said "seemed a lot more reasonable." The Keycorp CEO is also optimistic about the Basel III endgame rules, saying, "I feel pretty good about the regulatory environment broadly, but a lot of it is in the state of flux," citing the announcements over the last three weeks.

Although he is optimistic about the M&A pipeline, Gorman still sees hurdles for bank M&A, specifically the losses banks have to book on underwater securities portfolios.