© Reuters
(Reuters) – Citizens Financial (NYSE:) Group reported a second-quarter profit that beat Wall Street estimates as lenders’ net interest income rose in a high-interest-rate environment.
The upbeat results follow a tumultuous first quarter in which the global banking crisis – triggered by the collapse of three mid-sized U.S. banks – led panicked consumers to pull billions out in deposits.
The bank said its net interest income increased 5.5% in the second quarter to $1.59 billion, compared with $1.51 billion a year earlier.
Higher rates have helped several big U.S. banks post a strong profit for the quarter, signaling a resilient economy, but a pullback in consumer spending and tightening credit conditions are clouding the sector’s outlook.
Citizens Financial set aside $176 million to cover for the contingency of its customers defaulting on loan payments, compared with $216 million from a year earlier.
Average deposits fell to $173.2 billion in the three months ended June 30, compared with $174.4 billion at the end of the previous quarter.
The bank reported an underlying profit of $1.04 per share. Analysts, on average, had expected it to report $1.01 per share, according to Refinitiv data.
