Bank of America profit rises as it cashes in on higher interest rates

Bank of America Corp's profit rose in the first quarter as it earned more from customers' interest payments while the Federal Reserve raised borrowing costs.

The company's net income applicable to common shareholders rose to $7.66 billion, or 94 cents per share, for the three months ended March 31, the second-largest U.S. lender reported on Tuesday. That compares with $6.6 billion, or 80 cents per share, a year earlier.

Rival banking giants JPMorgan Chase and Co and Citigroup Inc also reaped windfalls from higher interest payments in the first quarter, while setting aside billions of dollars to prepare for a worsening economy.

Bank of America's net interest income, which reflects how much money the bank makes from charging interest to customers, rose 25% to $14.4 billion in the quarter.

The banking industry was rocked by the failures of two US lenders in March. The collapses battered bank stocks and prompted spooked depositors to move their cash to larger institutions.