Where Does a Bank's Income Come From?

[Suba]

Every business needs income to cover operational costs and generate profits. As financial institutions, banks also come in various types, including retail banks, commercial banks, investment banks, and central banks.

Banks' funds or capital come from shareholders or their own capital, loans from other financial institutions, and public/customer funds. To cover all costs, both operational and other expenses, banks need income. So, where do you think banks get their income?

 

[King Belieal]

Bank primarily make money from the charges they make on transactions that clients perform. They also make money from interests on loans.

 

[eLdavis]

I heard banks also trade the forex market, and invest in stocks and the likes then they make money with the profits. Banks also make money from giving out loans.

 

[Fidelia]

Banks use the fixed deposits that they receive to do invest and get returns too. They are smart with investments.

 

[Augusta]

Banks use these deposited funds to make loans to other customers and businesses (e.g., mortgages, auto loans, business loans). The bank charges a higher interest rate on these loans than it pays to depositors. This difference, or "spread," is the bank's primary source of revenue and profit.

 

[Starmix]

Bank owners and its corporate alliance put up a billion capital as bond before they could be allowed to operate by the Central Bank.