Truist reports Q4 loss on one-time charges, lower interest income

Jan 18 (Reuters) - Truist Financial Corp reported a loss in the fourth quarter on Thursday, hurt by a raft of one-time charges tied to regulatory and restructuring activities, and a fall in net interest income.

The lender took a $6.1 billion non-cash goodwill impairment charge, which it said will not impact liquidity, common share dividend payouts and capital ratios.

Truist also paid $507 million to replenish a regulator's deposit insurance fund that was drained after two mid-sized lenders collapsed in early 2023, and recorded another $183 million in charges related to restructuring.

Net interest income, the difference between interest earned on loans and payment on deposits, fell 10.7% to $3.60 billion in the fourth quarter ended Dec. 31 from a year earlier.

The U.S. banking industry had until recently seen large gains from the U.S. Federal Reserve's interest-rate hikes, aimed at controlling inflation, as they earned more on loans. But the Fed's hawkish stance has also led to tepid growth in loans as well as pushed up deposit costs for banks.

Truist's net interest margin contracted to 2.98% from 3.25% a year earlier.

Banks have had to raise their payout on deposits to retain customers from pulling out cash from their accounts to seek better returns in money-market funds that are flourishing due to Fed's high interest rates.

Truist posted a net loss available to common shareholders of $5.17 billion, or $3.85 per share, in the reported quarter. That compares with a profit of $1.61 billion, or $1.20 per share, a year earlier.

Adjusted profit came in at 81 cents per diluted share, compared with $1.30 a year earlier. (Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)