| Most subscribers own banking stocks, so let's | | | | interest for the privilege, and lend it out at a higher |
| examine how banks work and what drives their | | | | rate. Assuming they get it back, the difference is |
| profits. | | | | how they make their money. But before explaining |
| The Romans did more than popularise bloodsports | | | | this measure, let's look at a typical bank's structure. |
| and central heating. They also pioneered a banking | | | | We all know about retail banking, where the products |
| network that extended throughout much of Europe, | | | | consist of home loans, credit cards, personal loans |
| Asia and parts of Africa. Jesus, as we now know, | | | | and priority and private banking. Irritating queues and |
| didn't think much of it and bankers have been | | | | broken ATMs are also among the product offerings. |
| suffering from low self-esteem ever since. | | | | Business banking usually concerns small to medium |
| But that hasn't stopped many subscribers from | | | | sized businesses, typically with needs of less than |
| buying bank shares. Most investors own either a | | | | $50m, with larger clients handled by corporate or |
| regional banking stock or one of the big four, and | | | | institutional banking. |
| many own both. | | | | Finally, the newest and most rapidly growing area of |
| So, to give you a better understanding of their | | | | a bank's activities is wealth management. This area |
| attractions as an investment, we're going to explain | | | | handles funds management, financial planning and |
| over the coming issues what drives a bank's profit. | | | | trustee services on behalf of clients. |
| Banking basics | | | | The biggest and most recent change in the way that |
| The basics of banking haven't changed much since | | | | banks have operated has occurred with the switch |
| Jesus threw the moneychangers out of the temple. | | | | from relying on interest margins to fee income. |
| Banks take your money, paying you a rate of | | | | |