4. Providing Funds to Borrowers

Using the accumulated funds of many depositors, the bank makes loans to customers whom it considers likely to repay. When banks lend money, they put it to work. The money that people borrow goes to buy products or services, to manufacture goods, and to start businesses. In this way, the money that banks lend works to keep the economy going. 

The bank charges more interest on the money it lends than it pays depositors, so when the money is repaid; more comes in than what goes out. Loans are the application of funds for banking industry. It sourced funds from depositors and has applied these funds by providing loans to borrowers. 

5. Banking Costs

Banks incurs a large number of costs/expenditures to procure business, safeguard money and keep its operations going. Some example of costs includes maintaining the security of your money, personnel expenses, building maintenance costs, and so forth.  Profit, or net income, is what is left of revenue after costs are deducted.