(Reuters) -Truist Financial ( TFC ) reported a rise in third-quarter profit on Friday, driven by a strong wealth management segment and increased interest income, sending its shares up 2% in premarket trading.

A cooling labor market and moderating inflation prompted the Federal Reserve to cut interest rates in September, its first reduction this year, benefiting lenders by lowering deposit costs and boosting interest income through increased loan demand.

Expectations of further rate cuts later this year are also fueling optimism for improved margins and stronger credit growth.

Truist's net interest income - the difference between the interest it pays on deposits and what it earns on loans - rose 0.8% to $3.63 billion from a year ago.

Its wealth management income rose 6.9% to $374 million, driven by higher assets under management.

The Charlotte, North Carolina-based bank, however, reported a 2.7% fall in income from its investment banking and trading segment.

Truist reported its net income available to common shareholders came in at $1.35 billion or $1.04 per share, for the three months to September 30, compared to $1.34 billion or 99 cents per share in the same quarter last year.

As of last close, Truist's shares have lost nearly 5.3% year-to-date, lagging a 12.8% rise in the KBW Banking Index.