Are the profits disbursed by my brother permissible or forbidden? If they are forbidden, is it permissible to disburse them from the bank's profits? And are they to be disbursed in installments or as a lump sum?

Your brother's seizure of the inheritance and his evasion of debt repayment are an act of injustice and aggression, which is impermissible in Islamic law.

It is impermissible to deposit money in an interest-bearing bank, nor to take interest from the bank or from your brother's debt, because that is outright usury (riba).

Allah the Almighty says: (Those who consume interest will not stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is only like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns [to dealing in interest] – those are the companions of the Fire; they will abide eternally therein. Allah destroys interest and gives increase for charities. And Allah does not like every sinful disbeliever.)

And He, the Exalted, says: (O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war from Allah and His Messenger. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged.)

The interest you took from your brother or from the bank must be disposed of by giving it to charitable organizations or to the poor with the intention of purification [of unlawful gain], not with the intention of charity, because it is unlawful wealth.

It is impermissible to deduct the interest you received from your brother from the interest you received from the bank; both amounts are unlawful.

You must repent to Allah and dispose of the interest money immediately if you are able.