MONETA reported net profit of 1.29 billion crowns ($55.4 million) in the quarter, above the average estimate of 1.25 billion crowns in a Reuters poll.

Net interest income climbed 17% from a year before while total banking income was up 13% at 3.02 billion crowns.

Czech banks have got a lift from fast-rising interest rates since last year as the central bank has battled a surge in inflation, which is at its highest in nearly a quarter-century.

But high inflation, along with the impact of war in Ukraine, are starting to take a toll on the economy. Policymakers are cutting their outlook for growth.

MONETA Chief Financial Officer Jan Fricek said the bank had so far seen no decrease in its loan portfolio quality. MONETA released provisions in the first quarter, helping boost net profit.

MONETA, which is aiming to complete in the third quarter a planned 25.9 billion crown acquisition of rival Air Bank Group, owned by giant Czech investment group PPF, maintained its earnings outlook on Thursday.

It forecasts profit to reach at least 4.4 billion crowns in 2022, up from 4.0 billion crowns in 2021.

While costs could rise because of inflation and a possible higher contribution into a deposit-insurance fund, Fricek said better bank performance would compensate.

"So altogether we are still confident in delivering (our) guided net profit," Fricek said.

($1 = 23.2940 Czech crowns)

(Reporting by Jason Hovet; Editing by Bradley Perrett)