Bank of America CEO says interest rates going up for the 'right reason'

Bank of America Chairman and CEO Brian Moynihan told CNBC on Tuesday the prospects of stronger U.S. economic growth and higher interest rates have had a big, positive impact on business.

Shares of Bank of America have surged about 35 percent since Donald Trump won the presidency, swept up in the stock market rally since Election Day.

Appearing on "Squawk Box" from the World Economic Forum in Davos, Switzerland, Moynihan said there were a number of reasons for the strong performance.

"The team's done a great job with the clients and customers and getting expenses down, revenues stabilized," he said. "A lot of it was down to real hard work."

On Friday , Bank of America reported fourth-quarter adjusted earnings of 40 cents per share, which beat expectations by 2 cents a share. The bank also expects to earn $600 million in additional net interest income in the current quarter.

Revenue for the fourth quarter, of $19.99 billion, did fall slightly short of estimates.

Moynihan on CNBC Tuesday also cited: "The idea that there could be more growth. The idea that the rates could go up. ... Those all have a big impact to us."

Banks benefit from higher interest rates because they can charge customers more for lending.

The Federal Reserve increased rates in December for the second time in a decade. The previous rate hike was in December 2015.

"You want rates to rise for the right reason," Moynihan said. "There's good demand. Wages are rising in America. The economy is growing in America. That's the right reason."

In the latest Bank of America Merrill Lynch Fund Managers Survey, optimism for economic growth hit a two-year high . Among respondents, the biggest bets were on banks.

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