Bank of New York Mellon Corp. beat first-quarter profit estimates on Tuesday, benefiting from the Federal Reserve's rate hikes that boosted the lender's interest income.

Banks have been major beneficiaries of the Fed's aggressive monetary policy aimed at curbing decades-high inflation, which has also led to heightened market volatility and credit tightening.

The U.S. banking industry was thrown into a turmoil last month as bank failures dented investor confidence, pressuring both stock and bond markets.

The collapse of Silicon Valley Bank, the largest bank to fail since the 2008 financial crisis, fanned fears of a liquidity crunch and put financial institutions under scrutiny.

BNY deposits, a key metric investors have been focusing on this quarter following the bank sector troubles, fell 5% to $167 billion compared with the end of last year. They dropped 13% on a year-over-year basis.

The banking crisis along with the already existing concerns about a recession prompted BNY to set aside $27 million in provisions for losses, up from $2 million a year earlier.

On an adjusted basis, the bank reported a profit of $1.13 per share, edging past analysts' average estimate of $1.12 per share, according to Refinitiv IBES data.

The New York-based lender's net interest income for the quarter surged 62% to $1.1 billion, compared with $698 million a year earlier.

Assets under custody and administration increased 2% to $46.4 trillion, reflecting client inflows and net new business, the bank said.

Quarterly revenue jumped 11% to 4.4 billion.