You are incorrect- you're confusing money creation and central banks with commercial banks.
The point they're trying to make is about the entire monetary system, not one particular bank. Banks absolutely compete for deposit share on a bank by bank basis and absolutely lend those out.
Every single asset has to be funded. Deposits are the source of this funding. Without deposits, there would be no funding for loans. Look at any bank balance sheet and which side of it deposits are on.
The takeaway is that loans 100% come from deposits (and any other source of funding), this is simply how banks work. Money comes from central bank policy and the fractional reserve system. You're conflating central banks/monetary policy(money supply) and commercial(actual) banks/NII/funding. Put another way, you're talking about macro level money creation vs individual firm behavior.
Topic officially derailed, but I feel like this forum benefits from additional information about the monetary system and misinformation should be corrected.
Banks don't lend out depositors money. The loan is new money that didn't exist before.
http://www.forbes.com/sites/francescoppola/2014/01/21/banks-dont-lend-out-reserves/When i got my mortgage that money didn't come from some dude's account. The bank created it.
In fact, 92 to 96% of all currency is created in the 'retail' level banking system, and not by the government. That Wells Fargo on the corner? they are creating money.
It's crazy that people still think banks just lend out your money, but it is actually taught that way as a "simplified' version of fractional reserve banking, when it is in fact just false. Don't worry, you aren't the only who who has been fooled:
The standard not-actually-true method for teaching students about the workings of our monetary system is an explanation called the “money multiplier model” in which banks appear to lend out money that has been deposited with them. When some economists finish their degrees and subsequently go on to specialise in the monetary system and finally learn the full details of the process, they occasionally have some choice words to say about the undergraduate textbook model:
“The way monetary economics and banking is taught in many, maybe most, universities is very misleading”. Professor David Miles, Monetary Policy Committee, Bank of England.
“The old pedagogical analytical approach that centred around the money multiplier was misleading, atheoretical and has recently been shown to be without predictive value. It should be discarded immediately.” Professor Charles Goodhart CBE, FBA, ex Monetary Policy Committee, Bank of England.
“The textbook treatment of money in the transmission mechanism can be rejected”. Michael Kumhof, Deputy Division Chief, Modelling Unit, Research Department, International Monetary Fund.
“Textbooks assume that money is exogenous.” … “In the United Kingdom, money is endogenous” Mervyn King, Governor of the Bank of England.
An interview with Peter Stella, former head of the Central Banking & Monetary & Foreign Exchange Operations Divisions at the IMF:
"there is absolutely no correlation between bank reserves and lending. And, more fundamentally, that banks do not lend “reserves”."
"In banking today deposits at the central bank are totally unnecessary for lending."
http://goo.gl/4WZRKMichael Kumhof, International Monetary Fund:
"...banks do not have to wait for depositors to appear and make funds available before they can on-lend, or intermediate, those funds. Rather, they create their own funds, deposits, in the act of lending. This fact can be verified in the description of the money creation system in many central bank statements, and it is obvious to anybody who has ever lent money and created the resulting book entries."
-p.9
http://goo.gl/z274SAdair Turner, Chairman of the FSA in the UK:
"But in fact they don’t just allocate pre-existing savings, collectively they create both credit and the deposit money which appears to finance that credit."
-http://goo.gl/8078D
Merryn Somerset Webb, editor-in-chief of Money Week, The Financial Times:
"Every time they expand their lending they increase the supply of money in the economy. And every time they contract lending they reduce it"
-http://goo.gl/zwIxq
Alan Holmes, then Senior VP of Federal Reserve Bank of NY, 1969:
“In the real world, banks extend credit, creating deposits in the process , and look for the reserves later.”
-http://goo.gl/E43K1