July 16 (Reuters) - PNC Financial reported an

increase in second-quarter profit on Tuesday as higher fees from

underwriting and advising on deals helped the bank offset a

decline in interest income.

Lenders are seeing investment banking revenue recover after

a dry spell that lasted roughly two years due to rising interest

rates. Corporate clients are also re-evaluating deferred IPOs

and large buyouts, boosting fees for underwriters and advisers.

Capital markets and advisory revenue at PNC climbed 28% to

$272 million in the quarter, while asset management and

brokerage revenue rose 5% to $364 million.

The company's net interest income (NII), or the difference

between what a bank earns on loans and pays out on deposits,

fell 6% to $3.30 billion.

Most U.S. banks are expecting a decline in NII this year as

elevated interest rates have stymied loan activity, while

efforts to retain customers from chasing better returns

elsewhere have pushed up deposit costs.

PNC's net interest margin, a key measure of lending

profitability, decreased 19 basis points to 2.60%.

Average loans in the quarter fell 1% to $319.9 billion,

while average deposits declined 2% to $417.2 billion.

PNC forecast NII to be up between 1% and 2% in the third

quarter, when compared with the second quarter.

The bank now expects full-year NII to fall 4%. It had

earlier forecast a decline between 4% and 5% in 2024 interest

income.

PNC's net income attributable to common shareholders rose to

$1.36 billion, or $3.39 per share, for the three months ended

June 30, compared with $1.35 billion, or $3.36 per share, a year

earlier.