Banks generate income through a variety of ways:

1. Interest income: Banks make most of their money by charging interest on loans and paying lower interest rates on deposits. The difference between these interest rates is the banks' interest margin, which is their main source of profit.

2. Fees and commissions: Banks charge fees for various services like overdraft fees, ATM fees, account maintenance fees, wire transfer fees, etc. Banks also earn commissions from services like facilitating mortgages, investments, and insurance products.

3. Investments: Banks invest some of their funds in stocks, bonds and other financial assets. The returns from these investments contribute to the banks' profits.

4. Interbank lending: Large banks lend funds to and borrow funds from each other in the interbank lending market. The margins on these loans contribute to banks' interest income.

5. Mortgage loans and credit card loans: Banks make profits by providing mortgages to home buyers and credit cards to customers - again through the interest margin on these loans.

6. Foreign exchange transactions: When customers need to conduct foreign exchange transactions, banks generate income from the spread between buy and sell rates.

So in summary, banks generate income largely from interest margins on loans and deposits, fees & commissions, returns on investments, interbank lending and foreign exchange transactions. Loans, especially mortgages and credit cards, tend to be the largest source of income for banks.

Hope this helps! Let me know if you have any other questions.