A commercial bank is a bank that offers financial services to private customers and companies such as accepting deposits, checking services or loans. Commercial banks earn money through interest rates on the loans that they offer. Such rates are significantly higher than the interest rates paid to the bank customers for depositing their assets in a bank. This difference in rates is called net interest income, which is one of the leading indicators of bank performance.
Commercial vs investment banks
Some banks specialise only in commercial or investment banking, while some banks combine both divisions in their operations. Investment banks specialise in managing assets of their clients, underwriting securities or supervising merger and acquisition transactions.