They can earn a huge interest "spread," thanks to the government. They take on essentially ZERO credit risk by investing 100% in government-guaranteed investments (MFA is 99% in government-guaranteed investments). They collect around 5% interest. And they borrow money at low rates – around 3%
As the government tries to help the economy, it helps the virtual banks on both sides of their balance sheets hence letting them borrow cheaply and invest risk-free.