By Elizabeth Dilts Marshall

NEW YORK (Reuters) – Wells Fargo (NYSE:) & Co and JPMorgan Chase & Co (NYSE:) reported a rise in net interest income in the first quarter, as the U.S. Federal Reserve’s rate hikes help their bread-and-butter business –taking deposits and lending.

Fed rates were raised by quarter point to 0.2%-0.5% in March. A half-point was added on May 4.

This is a move to combat the 8.5% inflation. It will likely end the low-interest rate environment banks have had for the last decade, especially during the COVID-19 epidemic.

Net interest income is closely monitored to see how banks are making money from lending. This news should be good for them. This declined due to the drop in borrowing and interest rates, but it is slowly rising now.

Wells Fargo & Co led the pack, with net interest income for the first quarter rising 5% from a year ago. It also raised its 2022 expectations, stating that net interest income percentage growth could reach the mid teens.

In January we expected NII to be about 8% higher. “We’re nearly doubling it to kind of mid-teens because we’ve seen loan growth as well as substantial rate moves,” Mike Santomassimo, chief financial officer, said on a conference call with analysts. Loan growth overall was 3%.

The NII from JPMorgan Chase & Co’s core banking businesses, excluding the markets business, increased 9% from a year earlier, the bank said on Wednesday. The bank forecasts that the total NII will exceed $53 billion by 2022. This is roughly consistent with its February guidance.

“NII is about to improve. Jamie Dimon, Chief Executive of the NII told analysts that things would normalize.

Chief financial officer Jeremy Barnum indicated that the bank will continue to track the numbers and provide revised guidance regarding NII revenue. Analysts believe the bank will revise their guidance upwards.

Some banks still believe that rising interest rates are not in everyone’s favor. A higher interest rate could slow down economic growth and crimp overall lending. It may also discourage companies from generating fees through transactions.

Citigroup (NYSE)’s NII grew 3% during the first quarter last year. However, its Chief Financial Officer Mark Mason said that while it was premature to speculate on what higher rates might mean for Citigroup’s revenues this year when he was pressed by analysts. His revenue guidance was left unchanged by Mason, who said it would be a low single-digit percentage.