The business of banking doesn't seem very complicated at all, in fact, it seems quite straightforward and easy to understand, for banks make money in three basic ways: one is by charging the difference between the interest rate for money deposited within their institution and a higher interest rate for loans to consumers, businesses, and the issuance of mortgages; another way banks make money is the various fees that banks charged for accounts that fall below mandated minimums, bounced checks, ATM machines, and assorted other violations; and finally banks make money on their branded credit and debit cards by charging vendors that utilize credit and debit cards a fee for the privilege of using this alternative form of money instruments as well as interest charges to consumers for unpaid balances on those accounts.
Based on the above, one might think, that banks might make some money, but because of competition, fixed costs for opening up branches, bad loans, and so on and so forth, that the margin of money made and the money to be made would be fairly modest, akin perhaps to a grocery store, that has a profit margin of about 1%. That certainly makes sense, since true competition necessitates charging fees and interest rates that are not onerous to one's consumers of such, in addition to the fact that there are viable alternatives that consumers can utilize instead, as in other banks or credit unions.
However, in point of fact, banks make tremendous amounts of money, not all of the time, but often enough, in which, four banks have total assets of over $1 trillion dollars each, which are JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup. In addition, in 2015, JP Morgan Chase had profits of $24.4 billion dollars, Bank of America had profits of $15.9 billion dollars, Wells Fargo had profits of $22.9 billion dollars, and Citigroup had profits of $17.2 billion dollars. None of these banking institutions, could possibly be as large as they are, nor could they have these gargantuan profits it wasn't for the change of banking laws begun in the 1980s, that allowed interstate banking, so that whereas before banks were specific within a given State, now they were permitted to have branches in virtually every State of the union. This has meant that banks have grown considerably bigger than they were previously and that money has become more and more concentrated into fewer and fewer banking hands.
A reasonable conclusion in regards to the merger of banks and their consolidation would be that these massive institutions would be more efficient than local banks and credit unions, and therefore the consumers of banking would be the beneficiaries of more competitive interest rates and lower fees, but that hasn't been the case whatsoever for most people. Instead, the power and strength of these banking behemoths have placed them in the driver's seat of being in the situation so that when times are good they mint money hand over fist, and when times are bad, the Federal government bails them out, because they are "too big to fail," which instead of sending a signal that these humongous banking institutions need to be broken apart or nationalized, they are instead effectively subsidized.
Further to the point, banks are in the business of making money on the loaning of money, in which this type of business should be strictly regulated, perhaps akin to insurance companies or to utility companies, or, even better, in accordance with the nature of credit unions, which are non-profits, created to serve as conduits of loans to their members on a local basis, not on a national basis, so as to thereby keep the money circulating within that given community.
Banks today, make far too much money and have far too much power, so that, they cheat the consumers of such, by charging more interest and fees than they need to, because their sheer size and ubiquity, permits these massive banks to behave as a collective cartel, and therefore to effectively exploit the masses, over and over again.