Teacher Discussion Forums

"Banks have a vested interest in the growth
of their customers."
This is very difficult for me.
"Banks are indispensable for the customers'
growth"?

Thank you.

Banks make more money of richer clients.
It differs from bank to bank but about 80% of there income is generated through "structured lending" which is Tax or Derivative Based Finance. So the more a client is worth the more they can invest through the bank or borrow from it. Richer people hedge their risk and leverage their returns meaning they will invest in a 5 million dollar property with 1 million cash and 4 million borrowed. The client earns money on 5 million and the bank interest on four million.
Therefore banks have a vested interest in how well their clients do.

Thank you very much, blackmagic.
So is it nearly the same as:
"The (growth of) banks are dependent
on their customers' growth"?

Yes, well at least their profit is.