As you know, the work of all banks is aimed at making a profit. They receive it from the provision of banking services to individuals and legal entities. Banking organizations invest their money in different assets.
Instructions
Step 1
To obtain additional profits, credit institutions invest their funds in all sorts of areas of activity. This allows them to generate a certain income. First of all, this concerns the issuance of loans to the population of the country at interest. It is the receipt of interest that is the main source of profit for most banking institutions.
Step 2
The bank funds deposits of the population in retail lending. This way of generating income for credit institutions is the most attractive. And this is even despite the fact that this business is very risky, but it greatly simplifies the procedure for a bank to enter the market.
Step 3
Banks also use their finances to lend to corporate borrowers. To obtain high profits, they carry out serious work to attract solvent borrowers, which allows them to provide a competitive cost of the offered loan products.
Step 4
Most large credit institutions use their own money to buy shares of third-party companies and even competing banks. Most often, banks invest finance in shares of dynamically developing companies, as this allows them to get big profits.
Step 5
It should be noted that the activities of banks are not limited only to the monetary sphere. They often invest in various scientific projects, which, if successful, can bring good profits. In addition, credit institutions are engaged in construction investment. Such activity of banking institutions allows receiving good dividends, which contributes to an increase in their total capital. And this, as you know, significantly increases his rating.
Step 6
Recently, banks have increasingly begun to invest their savings in bonds of Russian companies. It is bonds that can guarantee high returns, which cannot be said about stocks, the market of which is gradually losing its popularity.
