Dec 9 (Reuters) - U.S. regional lender KeyCorp ( KEY ) is not looking to pursue acquisitions despite consolidation in the industry and will use its excess capital for share buybacks, CEO Chris Gorman said on Tuesday.

"I think there will be consolidation in our industry for a long time, we are not participating," he said at the Goldman Sachs Financial Services Conference in New York. 

Dealmaking has picked up across the regional banking industry as lenders look to cut costs and gain scale in a tougher operating environment, making KeyCorp's ( KEY ) move to not do M&A a notable departure from the recent wave of deals.

The comments come days after activist investor HoldCo Asset Management said it is pushing KeyCorp ( KEY ), in which it has built a sizeable position, to refrain from bank acquisitions. 

"We're still digesting it ... we're looking at all the content in there," Gorman said, referring to HoldCo's report. "Most important theme is a moratorium on doing bank deals. I think we're perfectly aligned on that."

HoldCo had successfully campaigned to push Comerica ( CMA ) toward a sale, which in October agreed to be bought by Fifth Third Bancorp ( FITB ) for $10.9 billion. The hedge fund has since pressed several U.S. regional lenders for changes.

Shares of the bank rose 3.3% in morning trading. The stock has lost roughly 16% of its value since January 2022. 

"We're going to spend time buying KeyCorp ( KEY ) stock. We are an undervalued stock, we believe that strongly and we're going to spend our capital buying our stock," Gorman said.  

Weak share performance often attracts activists who view the discounted valuation as an opportunity to press for changes they believe could lift the stock.

Activist campaigns in the banking industry are uncommon, but the sector has faced significant upheaval in recent years, which has weighed on investor confidence and opened the door to shareholder pressure.

"We absolutely agree with that investor that our shares are undervalued."