(Reuters) – Bank of America (BofA) reported better-than-expected first-quarter earnings on Tuesday, benefiting from higher lending rates as the U.S. Federal Reserve hiked interest rates ( fed).

The bank’s net profit, attributable to ordinary shareholders, reached 7.66 billion dollars (6.98 billion euros) or 0.94 dollars per share, over the period, against 6.6 billion dollars (0 $.80 per share) a year ago.

Analysts on average had expected earnings per share of $0.82, according to Refinitiv IBES data.

“Results were strong despite a challenging economic environment and market and banking sector volatility,” Alastair Borthwick, chief financial officer of Bank of America, said Tuesday.

The collapse of two US regional banks in March rattled the sector and heightened fears of an economic recession.

Faced with uncertain economic conditions, Bank of America provisioned $124 million during the first quarter.

Deposits with BofA fell 2% from the fourth quarter to $1.05 billion. Customers dissatisfied with the rates offered preferred to transfer their liquidities into money market funds to obtain better returns.

Investment banking revenue fell 20% to $1.2 billion due to weak global M&A activity.

In contrast, revenue from the retail banking division rose 21% to $10.7 billion, and revenue from trading in fixed income, currencies and commodities jumped 27%. , to 3.5 billion.

BofA’s net interest income, which reflects the remuneration obtained by the bank on loans granted to its customers, rose 25% to 14.4 billion dollars.

Last week, Citigroup, JPMorgan Chase & Co and Wells Fargo & Co also reported better than expected quarterly results on the back of higher interest rates.

Bank of America shares gained about 2% in pre-market trading.

(Reporting by Manya Saini and Niket Nishant in Bangalore and Saeed Azhar in New York, additional reporting by Siddarth S, Dina Kartit, editing by Blandine Hénault)

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