Banks have begun to raise their buffers for credit-loss provisions in the event customers, facing the brunt of high interest rates, are unable to pay back debt on their credit cards or miss loan repayments.
"We prudently increased our provision and allowance amid the uncertain economic backdrop," Truist CEO Bill Rogers said in a statement.
The bank set aside $538 million in provisions for credit losses in the quarter ended June 30, compared with $171 million a year earlier.
Truist shares fell about 3% in premarket trading after the results were announced. The stock is down 17.3% so far this year, through previous close.
Average deposits at the bank declined 2% sequentially as customers continue to chase higher yielding alternatives for better returns. They fell 5.7% in the second quarter compared to a year earlier.
Analysts have warned that banks would need to raise the interest they offer clients on their account balances, bringing deposit costs in focus for the remainder of the year.
Net interest income, which measures the difference between what banks earn on loans and pay out on deposits, climbed 7% to $3.68 billion in the quarter, benefiting from the rise in benchmark lending rates.
Net income available to common shareholders of Truist in the three-month period was $1.23 billion, or 92 cents per share, compared with $1.45 billion, or $1.09 per share, a year earlier.
Analysts on average had expected $1.01 per share, according to Refinitiv data.
