Oct 17 (Reuters) - M&T Bank ( MTB ) reported a jump in

third-quarter profit on Thursday, helped by a rise in fees from

institutional services and wealth management businesses and as

the lender set aside less money to cover potential bad loans.

With the U.S. Federal Reserve finally joining the global

rate-cutting cycle, regional lenders are poised to benefit as

lower interest rates will help dissipate the commercial real

estate overhang on the banking industry.

M&T's provision for credit losses fell to $120 million in

the quarter from $150 million a year earlier, thanks to lower

levels of criticized commercial real estate and commercial and

industrial loans, the bank said.

Criticized loans are those that are deemed to have an

elevated level of credit risk.

M&T's fees from institutional services and wealth management

businesses rose $15 million to $170 million in the reported

quarter from a year ago, thanks to robust capital markets.

Meanwhile, M&T's net interest income (NII) - the difference

between what banks pay customers on deposits and earn as

interest on loans - fell about 2.8% to $1.73 billion in the

quarter from a year earlier.

Banks have been paying out higher rates on deposits to

prevent customers from moving to rivals or higher-yielding

alternatives such as money market funds.

Net income available to common shareholders rose to $674

million, or $4.02 per share, in the three months ended Sept. 30,

from $664 million, or $3.98 per share, a year earlier.

M&T expects NII of $1.73 billion plus in the fourth quarter,

in-line with Wall Street expectations. The forecast factors in

two 25-basis-point rate cuts by the Fed.

The bank said the NII range is primarily dependent on

deposits trends and loan growth in the fourth quarter.

M&T shares have gained 38% so far this year as of last

close, outperforming the 22.5% jump in the benchmark S&P 500

index.