(Reuters) – M&T Bank beat Wall Street estimates for third-quarter profit on Wednesday, as the Federal Reserve’s rapid rate hikes allowed the lender to charge more on loans.
The higher-for-longer interest rate environment has benefited major U.S. lenders such as such as JPMorgan, Wells Fargo and Citigroup, who also beat quarterly estimates and raised FY23 interest income forecasts.
M&T’s net interest income — or the difference between what a bank earns on loans and pays out on deposits — jumped 5.7% to $1.78 billion in the quarter ended Sept. 30.
The bank reported adjusted profit of $3.98 per share, compared with analysts’ average estimate of $3.93 per share, according to LSEG data.
But the Fed’s aggressive monetary policy has made it difficult for customers to borrow and repay debt, prompting lenders to set aside more rainy-day funds to cover for potential defaults.
M&T set aside $150 million as provision for credit losses, compared with $115 million a year earlier.
The company’s total deposits in the quarter rose to $164.13 billion, 1.3% higher than the preceding three months and marginally up from the year earlier.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shilpi Majumdar)
