Jan 20 (Reuters) - U.S. Bancorp reported a nearly 23% jump in fourth-quarter profit on Tuesday as the country's fifth-largest lender earned more from interest payments and saw growth in fee revenue.

A string of rate cuts by the Federal Reserve has lifted loan demand across the industry and boosted earnings at Wall Street's top consumer banks.

U.S. banks have also reduced deposit costs as benchmark rates decline, while also benefiting from the repricing of fixed-rate assets.

Net interest income — the difference between what the bank earned on loans and paid out on deposits — rose 3.3% to $4.28 billion in the reported quarter from a year earlier.

"Record consumer deposits this quarter and effective balance sheet remixing contributed to net interest income growth and margin expansion," CEO Gunjan Kedia said in a statement.

Fee revenue was another bright spot, lifted by strong performances in its capital markets and impact finance businesses. It jumped 7.6% from a year earlier to $3.05 billion in the fourth quarter.

Profit attributable to U.S. Bancorp jumped to $2.05 billion, or $1.26 per share, in the three months ended December 31, compared with $1.66 billion, or $1.01 per share, a year earlier.

Total quarterly revenue jumped 5.1% to a record $7.37 billion.

The bank is also poised to bolster its Wall Street operations with its planned purchase of brokerage ​BTIG for up to $1 billion, which will augment U.S. Bancorp's advisory capabilities in equity capital markets as well as mergers and acquisitions.

Under Kedia's leadership, the bank is pushing to further diversify its fee businesses, which make up 42% of its revenue.

Excluding the BTIG acquisition, U.S. Bancorp expects between 4% and 6% revenue growth in 2026.

NII is expected to jump 3% to 4% in the first quarter from a year earlier, while fee revenue is expected to grow between 5% and 6%.