The banks profit also eventually get's paid out as dividends of the bank's shareholders and then they spend it, the same as any other company.
Well, that's theoretically true. In practice, fractional reserve banking results in the majority of interest bearing loans granted by banks within the Federal Reserve system are loaning out money that did not exist prior to the issuance of the loan. Roughly 85% of all interest paid towards loans by banks are kept entirely by the bank due to those loans not being backed by any depositors to be compensated. That 85% interest is the majority of the driving force of inflation in our modern world, the principal amount ceases to exist as the loan is either repaid, or defaulted upon. This is part of the reason that banks are constantantly loaning out new funds, otherwise as loans are repaid (or defaulted upon) the currency in circulation would decrease, resulting in an overall deflationary environment.
I was speaking of banks operating in a world with a finite money supply, like BTC. Understood about fractional reserve banking.
?? This is wrong. Lets check again: