Oct 15 (Reuters) - Citizens Financial's

third-quarter profit rose more than 29% on Wednesday, driven by

higher interest income, while strong capital markets boosted

fees from advisory and underwriting.

An interest rate cut last month eased deposit costs amid

labor market challenges and persistent inflation, while

AI-driven investment has helped mitigate uncertainty surrounding

tariffs, which led to a 20-year low in dealmaking in April.

Citizens' net interest income - the difference between what

banks pay customers on deposits and earn as interest on loans -

rose to $1.49 billion for the three months ended September 30

from $1.37 billion a year ago.

Its net interest margin expanded 23 bps over the period,

signaling strength in a key measure of banks' profitability.

The lender's results mirror those of larger rivals JPMorgan

Chase ( JPM ), Wells Fargo ( WFC ) and Goldman Sachs ( GS ),

which also reported higher profits on Tuesday, benefiting from a

dealmaking resurgence.

"A pick-up in market activity drove our highest Capital

Markets revenues since the fourth quarter of 2021, with

pipelines remaining strong," Chairman and CEO Bruce Van Saun

said.

Citizens reported total non-interest income of $630 million

for the period, up 18% from a year ago, on higher fees from

advising on M&A, loan syndication and equity underwriting.

The bank's provisions for credit losses fell 10% to $154

million in the quarter. Peer PNC Bank also reported

lower rainy day funds.

It reported quarterly profit of $494 million, or $1.05 per

share, up from $382 million, or 77 cents, a year earlier.

Its shares have risen nearly 18.4% in 2025, as of last

close, compared with a 16.6% gain in the KBW Bank index.

Shares of the bank fell 1.4% premarket after the results.