(Reuters) – Wells Fargo raised its full-year net interest income outlook on Friday and reported a 67% jump in second-quarter profit, driven by higher interest rates.

The company posted net profit in the second quarter ended June 30 of $4.94 billion (4.40 billion euros), or $1.25 per share, up from $0.75 per share. action registered a year ago.

Its net interest income (NII), a particularly scrutinized measure of a bank’s performance on its lending business, rose 29% to $13.16 billion as banks increased their borrowing costs following a series of rate hikes by the Federal Reserve aimed at controlling inflation.

The fourth-largest US lender forecasts an NII for 2023 about 14% higher than the $45 billion posted last year. She had previously anticipated a 10% increase.

Wells Fargo stock was up nearly 4% in pre-market trading.

Provision for credit losses includes an increase of $949 million, primarily to offset potential losses in commercial real estate loans as well as higher credit card loan balances.

Commercial real estate is a concern for banks, with financing costs rising as many buildings empty out with the spread of telecommuting.

The increase in the provision also comes amid growing concerns about the health of the economy.

“The U.S. economy continues to perform better than many expected, and while the economic slowdown continues and uncertainty remains, it is entirely possible that the range of scenarios will narrow over the next few months. coming quarters,” said Charlie Scharf, CEO of Wells Fargo, in a statement.

(Reporting by Noor Zainab Hussain and Manya Saini in Bangalore and Saeed Azhar in New York; Victor Goury-Laffont, editing by Kate Entringer)

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