How does a bank earn revenue?

Answer 1

Interest on loans

Presuming you are talking about "Commercial" or "Retail" banking, yes, loans to individuals and businesses make up the large majority of revenue. However, they also make a very substantial portion of their revenue on "user fees" - this portion of their revenue stream has steadily increased over the past two decades.

For Investment Banks, they make the majority of revenue from several sources: investment speculation, return on direct investments (e.g. dividends from corporations which they own portions of), investment management fees (e.g. fees for managing money in financial instruments such as mutual funds), and legal fees (e.g. lawyer fees for helping close mergers, etc.).

Answer 2

From banking activity: ( Interest received on loans and advances less interest paid on deposits. ( call this as A)

From payment system activity : Commission and brokerages earned. ( Call this as B )

From investment activity: Realised profit or loss plus accrued profit or loss on investments... ( call this as C)

Profit for the bank A +B+C.

For the purpose of revenue : It will be interest received on loans and advances +commission and brokerages earned + realised profit or loss.

Answer 3

The primary sources of bank revenue are from fees and interest charged on their services. This includes loans and credit cards which are highly profitable.