(Reuters) – M&T Bank Corporation beat Wall Street estimates for second-quarter profit on Wednesday, as the U.S. Federal Reserve’s rapid rate hikes to tame inflation boosted the lender’s interest income.
Most consumer-facing lenders have tapped higher rates to charge more interest on their loans and credit card debt, with M&T’s upbeat results echoing larger rivals JPMorgan Chase, Wells Fargo and Bank of America.
M&T’s net interest income surged 27% to $1.81 billion, helping the bank report an adjusted profit of $4.11 per share, above analysts’ average estimates of $4.04 per share, according to Refinitiv IBES data.
Still, banks have been slow to pass on high interest rates to their deposit holders, driving a shift to higher-yielding assets such as money market funds. A U.S. banking crisis in March had also triggered deposit outflows worth billions, which has since stabilized.
M&T’s total deposits rose to $162.1 billion from $159.1 billion at the end of the first quarter, but fell about 4.9% year-over-year.
Net income available to common shareholders in the quarter was $841 million, or $5.05 per share, compared with $192 million, or $1.08 per share, a year earlier.
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Shares of the bank were flat in premarket trading after results. The stock has declined 7.1% so far this year, through its previous close.
(Reporting by Manya Saini in Bengaluru; Editing by Devika Syamnath)