Higher interest rates boosted big banks’ net interest income (NII) in the second quarter, which is the profit banks earn from charging higher interest rat💧es to borrowers than they pay out to depositors and account holders.

JPMorgan Chase (JPM) reported one of the biggest gains when it released its 澳洲幸运5官方开奖结果体彩网:second-quarter earnings on Tuesday. Net interest income at America’s largest bank surged 44% to $21.9 billion, or 38% excluding the company’s 澳洲幸运5官方开奖结果体彩网:purchase of First Republic Bank in May.

Gains were also impressive at Bank of America (BAC), the nation’s second-largest bank by assets. Net interest income rose 14% to $14.2 billion, helping propel an 澳洲幸运5官方开奖结果体彩网:11% gain in revenues and a 21% annual gain in 澳洲幸运5官方开奖结果体彩网:earnings per share (EPS).

At Bank of New York Mellon (BK), net interest revenue surged 33%, driving a 5% increase in total revenues to $4.5 billion.

Not all banks benefited from higher interest rates. State Street (STT), one of the nation’s biggest 澳洲幸运5官方开奖结果体彩网:custodian banks, said NII fell 10% from the previous quarter as deposits fell. However, it was still up 18% year-over-year, reflecting the sustained rise in interest rates over the past year. The bank warned on an earnings call that NII could decline another 12% to 18% on a sequential basis due to falling deposit levels.

The 澳洲幸运5官方开奖结果体彩网:Federal Reserve’s rate hikes since March of last year have pushed interest rates to the highest level in more than 15 years and raised borrowing costs on everything from mortgages to credit cards and auto loans. Fed officials will likely 澳洲幸运5官方开奖结果体彩网:hike interest rates for the 11th and possibly final time of this cycle at next week’s FOMC meeting, raising the benchmark 澳洲幸运5官方开奖结果体彩网:federal funds rate another 25 澳洲幸运5官方开奖结果体彩网:basis points (bps) to a range of 5.25% to 5.5%, the highest in 22 years.

Banks tend to benefit from rising interest rates as their 澳洲幸运5官方开奖结果体彩网:net interest margins, the difference between interest income and expenses, improve. When rates rise, banks are able to charge higher in♛terest rates on newly issued loans than they pay out to depositors.

There is a caveat, however. If interest rates rise too much or too quickly, it could discourage potential borrowers from seeking loans, leading to an economic slowdown and a hit to the lending side of a bank’s business.