Diversification in banking: is noninterest income the answer?

THE U BANKING industry is steadily shifting away from traditional sources of income like loan making and toward activities that generate tee income, service charges, trading receipts and other types of noninterest income. While noninterest income has always played an important character in banking revenue. Figure 1 clearly present to views its growing importance. (1) by the agency of 2001, noninterest income accounted for 43% of gin operating revenue (net interest income plus noninterest income), up from alone 25% in 1984.

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This shift toward noninterest income has contributed to higher horizontals of bank revenue in new years, but there is also