Lets not turn this into a debate about how banking works (this has been explained in other threads)*.
Banks earn their money on the interest rate spread + fees. Home loans are quite sticky - a customer is unlikely to change home loans every 6 months. A sticky customer allows the bank to try and sell a product such as a credit card or personal loan to the customer which carries a much higher interest rate spread.
Banking (in it's pure form) is a function of 2 metrics. Volume (size & number of loans) and Price (Interest rate).
For some banks the volume of home loans is 10x the volume of credit cards, but the spread on credit cards is 10x the spread on home loans (even taking into account customers who pay off the balance in full each month).
*Having said that, Kaplin261 is correct (except for the average deposits comment - you can't leave out the gigantic cash balances held by corporations, mutual funds and pension funds). I hate the term "fractional reserve"** but it is what it is.
The system only works because depositors don't generally withdraw all their money at the same time.
**This feeds into the whole M0, M1, M2, M3 thing. I am no longer smart enough to explain it properly.