Why do banks charge a spread on credit? According to the doctrine of the money multiplier (https://en.wikipedia.org/wiki/Money_multiplier), a positive reserve ratio means a bank has LESS loans than deposits. See the table in the link. Therefore, if a bank gets a loan of 100, it can lend, say 80. Here I understand that the interest rate on loans must be higher than the interest rate on deposits, so that the bank can make a profit.

HOWEVER, there are other theories like endogenous money theory which state that actually, if a bank has 100 in deposits, it creates 900 of bank money (see https://en.wikipedia.org/wiki/Reserve_requirement). In this case, there is no need for the bank to charge a spread! 

Can you guide me on this? I am confused!

Is this a proof that the money multiplier is correct?
You're getting two quite different concepts mixed up:


Banks earn a spread on loans for serving as an intermediary between savers and borrowers and for holding credit risk.
The process of borrowing and lending, of banking, leads people in an economy to have more liquid assets (money in a broader sense), than there is underlying cash.


When economists say banks "create money" they don't mean they're printing money off the presses and giving it to themselves as profits. 

How banking expands the money supply

To understand banking clearly, its helpful (perhaps 100% required) to understand and use the fundamental equation of accounting:

$$ \mathrm{Assets} = \mathrm{Liabilities} + \mathrm{Shareholders Equity} $$

Let's say Warren Buffet decides to start a bank. He puts in \$10 billion of his own money. The balance sheet of the bank would look like:

$$ \begin{array}{r|rr}\text{Assets} &amp; \text{Liabilities} &amp; \text{Equity} \\ \hline \$10 \text{ cash}&amp; &amp; \$10\end{array} $$

Let's say he now collects \$90 billion worth of deposits from people. These bank deposits are assets for the people, but they are liabilities to the bank (the bank owes the depositors \$90 billion).
$$ \begin{array}{r|rr}\text{Assets} &amp; \text{Liabilities} &amp; \text{Equity} \\ \hline \$100 \text{ cash}&amp; \$90 \text{ deposits} &amp; \$10\end{array} $$

Now let's imagine that the bank lends out $80 billion. The balance sheet would then look like:

$$ \begin{array}{r|rr}\text{Assets} &amp; \text{Liabilities} &amp; \text{Equity} \\ \hline \$20 \text{ cash}&amp; \$90 \text{ deposits} &amp; \$10  \\ \$80 \text{ loans}\end{array} $$

Depositors have \$90 billion in deposits, and the borrowers have \$80 billion in cash. So the economy now has \$170 billion in money where there previously was only \$90 billion.

A key point to realize...

Across the whole economy, all these assets and liabilities cancel out! Borrowing and lending (on its own) is not creating any real wealth. The expansion of the banking system's balance sheet is simply creating more entries on the assets and liabilities side that cancel out. To the extent though that the liabilities of the banking system, deposits etc... are easily tradeable, this does create more money in the economy. More people have liquid assets in the form of bank deposits etc... (which are liabilities of the bank).