Why are bank profits so high? We will go through a few reasons: higher interest rates, better loan performance and higher non-interest related charges. As we explain in our recent blogbank basically makes money by borrowing from you via deposits and lending to those that need a mortgage or another type of loan. As Fed has been increasing short term interest rates sincethe rate at which banks lend has gone up, while banks have not increased your deposit rate. We explain why that happens in our other recent blog. However, the result of that is that banks can pick up a greater difference in rates between what they borrow and at what rate they lend. The second contributor to better bank profits is better loan performance. If those loans do better than anticipated, then it goes straight to bank profits. As economy has been doing better since the financial crisis, actual loan losses have been decreasing, contributing to bank profits. Well, a few dollars here and there add up. Check us .