Capital One Financial beats profit estimates on higher interest income

(Reuters) – Consumer lender Capital One Financial (NYSE:) reported a second-quarter profit on Thursday that beat analysts’ estimates, helped by higher income from borrowers following a rise in benchmark lending rates.

The U.S. Federal Reserve has aggressively hiked interest rates over the past 12 months to tackle sticky inflation, a move which has boosted profitability for consumer facing banks, allowing them to earn more from loans.

Net interest income at Capital One, which is the difference between what banks earn from lending and pay out on deposits, rose 9% to $7.11 billion in the second quarter.

On an adjusted basis, the bank earned $3.52 per share.

Analysts had expected a profit of $3.23 per share, according to data from Refinitiv.

Deposits have largely steadied at mid-sized banks in the ongoing quarter after a bank run by spooked customers led to the demise of three banks earlier in the year.

Total deposits at Virginia-based Capital One were up 12% at $343.71 billion in the second quarter.