a vested interest in

Itasan · Post by **Itasan** » Thu Mar 20, 2008 11:05 pm

"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.

blackmagicABC · Post by **blackmagicABC** » Fri Mar 21, 2008 1:18 am

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.

Itasan · Post by **Itasan** » Fri Mar 21, 2008 2:06 am

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

blackmagicABC · Post by **blackmagicABC** » Fri Mar 21, 2008 8:40 am

Yes, well at least their profit is.