Jan 13 Reuters Bank of America Corp reported a biggerthanexpected fourthquarter profit on Friday, helped by a surge in net interest income as the U.S. Federal Reserve raised rates through most of last year.

The 39;higherforlonger39; rate environment to battle decadeshigh inflation has underpinned profits at consumer banks, with analysts expecting those gains to peak in 2023 and help offset sluggish dealmaking as well as bigger loan loss provisions.

Bank of America39;s net interest income NII a metric that measures the difference between the interest earned on loans and paid out on deposits surged 29 to 14.7 billion in the quarter.

Its profit applicable to common shareholders rose 2 to 6.9 billion, or 85 cents per share. Analysts, on average, had estimated a profit of 77 cents per share, according to Refinitiv IBES data.

The bank39;s revenue, net of interest expense, increased 11 to 24.5 billion.

We ended the year on a strong note, growing earnings year over year in the fourth quarter in an increasingly slowing economic environment, Chief Executive Brian Moynihan said in a statement.

The economic outlook darkened in 2022 as the RusssiaUkraine conflict, high inflation and growing fears of a recession prompted lenders to set aside bigger reserves for bad loans and also cast a pall over capital markets, curbing investor appetite for deals and straining investment banking units.

Bank of America39;s investment banking fees more than halved to 1.1 billion in the…