This paper examines the joint impact of bank- and country-based drivers of performance of banks in 11 Asian countries. The panel data technique is used to deal with possible endogeneity issues and the heterogeneity of individual banks. We find evidence that the ownership structure and the capital ratio are critical determinants of the banks’ profitability. The revenue diversification impacts negatively on the net interest margin. Examining the institutional factors of banks’ performance, we find that enhanced financial and regulatory structures reduce the capacity to generate non-competitive, abnormal profits. Those most affected are the consumers, who bear the burden of higher prices resulting from weak competition.