While it is true that banks are able to borrow money at historically low interest rates at the moment, the rate at which banks have been able to lend money has also been compressed recently, and the banking industry's profit margin in between those two rates is shrinking. However, in this video, Motley Fool financial analyst Matt Koppenheffer points out that while these shrinking margins are hard for banks across the industry, very low interest rates also mean banks are doing a huge amount of volume in mortgage and mortgage refinance loans, and the fee business from those loans is booming.
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The article 1 Reason Banks Are Making So Much Money originally appeared on Fool.com.Fool contributor Matt Koppenheffer owns shares of Bank of America. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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