This is one reason many banks prefer customers to use ATM machines and internet banking as opposed to visting an in-branch teller. The cost is enormously high. Interest rates are the single most important aspect of bank profitability. Most bank profits are derived from net interest income . This is interest income received on loans minus interest expense for borrowed fuunds.
Interest rates determine the amount of money a bank can earn.
Another measure is a banks' net interest margin which is a bank's net interest income divided by its average earning assets. This is a common measure of a bank's ability to squeeze profits from its loans. When interest rates fall, they have a positive effect on a bank. First, net interest margin can expand. Second, the value of a bank's fixed rate of investment portfolio is enhanced by declining rates, since a bond with a higher stated interest rate becomes more valuable as prevailing rates drop.