How A Bank Makes Money

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		Tech Media Wall Street Markets Strategy Sports Tools Travel Politics Latest Video Thursday, May 12, 2011 How A Bank Makes Money To some of you this will be totally elementary, but it's still good to get a refresh. Via a Deutsche Bank report, here's a breakdown of bank revenues based on the industry average. Obviously, the biggest source of income is Net Interest Income. Here's Deutsche's definition: The largest component of a bank’s revenue is net interest income (NII)—which accounts for about 65% of revenues on average. NII is the dollar difference between the interest earned on a bank’s earning assets (i.e. loans, securities and other interest earning investments) and the funding cost of a bank’s liabilities—which consists of deposits and borrowings. NII is driven by volumes (i.e. assets) and spreads (net interest margin). Read » Also On Clusterstock Today: 11 Weird Rumors Going Around About Goldman Sachs The Fabulous Life Of Billionaire Raj Rajaratnam (Before He Was Convicted) Why BofA Is Bullish On One Of The World's Biggest Silver Companies Here's What George Bush And Bill Clinton Said About U.S. Debt And Unemployment At UBS On Monday Advertisement CHART OF THE DAY: An All-Time Record For American Exports CHART OF THE DAY: Don't BTD In Egypt CHART OF THE DAY: The Student Loan Debt That Never Stops Rising Share this email: Buzz Facebook Twitter Digg Reddit StumbleUpon The email address for your subscription is: dwyld.kwu.careers@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Clusterstock RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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