Is it okay for banks to make losses?
Basically, yes it is.
That might sound surprising, but losses are, in fact, an unavoidable part of the business of banking. Banks offer various services to customers such as accepting deposits and providing credit such as mortgages or credit card loans. Lending is profitable because a bank will charge a higher interest rate on loans than the rate it pays out on your savings.
The problem is that some loans are never repaid – which can cause a bank to make a loss. Of course, the bank might expect some borrowers to default on their loans. And it factors this into its business by charging higher interest rates for more risky types of lending. But sometimes, more borrowers are unable to repay their debts than the bank had expected. And in such cases the bank might make a loss overall.
Of course, banks try to avoid losses – they need to be profitable to survive. But they cannot eliminate losses altogether. So instead they need to make sure that they have enough of a buffer to be able to withstand losses when they occur.