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How Banks Actually Make Money
Net interest margin, fee income, and trading. Understanding the mix changes how you read a bank's stock.
A bank borrows short (deposits) and lends long (mortgages, corporate loans). The spread is net interest margin, and it expands when the yield curve steepens.
When you see banks rally on rate-cut news, it's because the curve is steepening. When they sell off on inversion, same reason in reverse.