In spite of the fact that it is society that does the real lending, the bank has still performed a useful service, albeit without parting with anything material in the process, and deserves payment for that service. But what exactly is the service?
The service is to make money available to those who need it and are able to repay it. In the process it puts itself at risk in the event of the borrower defaulting on repayment.
The bank has created money which circulates round the economy, and regardless of where the originally created money is at any time the value of that amount of money remains a liability until paid back by the borrower. If the borrower defaults then the bank asset represented by the loan agreement becomes worthless, but the liability that balanced it still remains and the bank's balance sheet must then be rebalanced. In fact the liability represented by the shareholder equity goes down by the amount of the default, which means that the value of the bank has dropped by that amount.
Therefore the bank is entitled to a premium (in effect a default risk insurance premium) from the borrower to cover the risk of default, and since the risk is related to both the amount of the loan (the bigger the loan the more the bank loses in a default) and the duration of the loan (the risk exists for as long as the loan exists), the default premium takes the form of a component of interest and not only is the bank fully entitled to it indeed it must charge it or it will go out of business. Default risk is quantifiable from a borrower's credit rating. Collateral lodged by the borrower significantly reduces and often completely eliminates this risk. In default the bank sells the collateral for money which is then destroyed along with the original loan agreement. In these circumstances society gets the wealth represented by the collateral in the same way as if the borrower had created an equivalent amount of wealth to pay back the loan. In effect the borrower does pay back the loan by trading pre-existing wealth rather than by creating new wealth.
The bank also has to carry out some administration to set up the loan and manage the repayments, which is related loosely to the duration of the loan but isn't related to the amount of the loan, and in modern systems is largely automated, so a small fixed fee can be expected to cover this.
Additionally the bank must manage its cash flow (i.e. BoE reserves and real cash - notes and coins), which places an extra management burden that is related to both the amount and duration of the loan. Therefore a small additional component of interest is appropriate to cover these costs.
The above costs represent a baseline that banks have to charge to stay in business. Over and above this, being private businesses, they charge as much as they can and pay out as little as they can in order to maximise profits.
The free market philosophy of banking maintains that with sufficient competition interest rates will be driven down to the minimum to sustain the business but without undue profit, because if the profits were too high more competitors would enter the market and drive them down again. However as was seen in chapter 46 there are massive barriers to entry for would-be banks and massive economies of scale for large existing banks. For these reasons banking is anything but an ideal free market, and as a result banks are immensely profitable - until that is they over-reach themselves in trying to make even more profit - see chapter 54.