On Monday, M&T Bank Corp. surpassed Wall Street expectations for the first quarter’s earnings as a result of the U.S. Federal Reserve’s accelerated rate hikes to manage excessive inflation. Heavyweights in U.S. banking have also benefited from greater interest payments in the first quarter, avoiding a crisis brought on by the failure of two local lenders.
Markets and the outlook for the economy have been disrupted by the Fed’s aggressive monetary tightening, which has benefited the majority of consumer-facing lenders. In premarket trading, shares of M&T Bank increased by roughly 3% to $120. This year, they have lost almost 20% of their worth.
In the first quarter that concluded on March 31, the bank’s net interest income more than quadrupled to $1.83 billion from $907 million in the same period last year. Compared to the $163.5 billion at the end of the previous quarter, M&T Bank’s total deposits decreased by about 3% to $159.1 billion.
The banking crisis has shaken investor trust in the sector, and while they expect deposit withdrawals to moderate in the upcoming months, a recovery is unlikely in the short term without a robust demonstration of earnings power, analysts say, according to Reuters.
M&T Bank CFO Darren J. King said the results reflect the company’s diversified banking model, which reflected loan growth and “steady” credit quality, as well as a “strong liquidity position.” Net interest income rose to $1.83 billion from $907 million.
According to Refinitiv IBES statistics, M&T Bank posted a quarterly profit of $4.01 per share, exceeding analysts’ average forecast of $3.99 per share. In light of the uncertain economic outlook, the bank set aside $120 million, up from $10 million in the corresponding period last year, to cover loans that might become problematic.
