PrintM&T Bank's quarterly profit rises on strong interest income
BY Reuters | ECONOMIC | 06:24 AM EDTApril 15 (Reuters) - M&T Bank
Loan demand has been resilient in the U.S., with healthy consumer spending, even as economic uncertainty and rising tensions involving Iran fuel inflation amid oil supply disruptions.
However, a prolonged conflict could weigh on consumer sentiment and spending, as higher energy prices could squeeze household budgets, in turn dampening loan demand and borrowing activity.
M&T's net interest income, the difference between what banks pay customers on deposits and earn as interest on loans, rose nearly 3.4% to $1.75 billion in the first quarter from a year earlier.
The Buffalo, New York-based bank's quarterly net interest margin widened 5 basis points to 3.71%.
Non-interest income rose roughly 13% to $689 million in the first quarter, helped by growth in mortgage banking.
Trust income rose to $183 million from $177 million, while mortgage banking revenue rose 8%, driven by an increase in residential mortgage loan servicing income.
The bank set aside $140 million in provisions for credit losses, the reserves banks hold to cover potential loan defaults, compared with $130 million a year earlier.
Higher provisions indicate banks are preparing for a potential rise in loan defaults, setting aside more reserves to cover losses if borrowers face financial strain.
Net income available to common shareholders rose to $620 million, or $4.13 per share, from $547 million, or $3.32 per share, a year earlier.
M&T's shares have gained nearly 9.5% this year. (Reporting by Prakhar Srivastava in Bengaluru)
