This study aims to analyze the factors affecting the profitability of banks in the eurozone and to provide recommendations for enhancing profitability in individual eurozone countries. The research focuses on identifying bank-specific and macroeconomic determinants of profitability and their impact on bank management. Using quarterly data from Eurostat for 18 eurozone countries over the period 2015–2020, the study employs random effects, fixed effects, and generalized method of moments (GMM) models. Key findings include: 1. **Bank-Specific Determinants**: - Non-performing loans (NPL) and cost-to-income ratio (CIR) negatively impact bank profitability. - Net interest income to operating income (NIM), net income from trading assets to operating income (NIT), and net income from fees and commissions to operating income (NIF) positively impact bank profitability. 2. **Macroeconomic Determinants**: - Gross domestic product (GDP) positively impacts bank profitability. - Inflation rate, unemployment rate, and gross government debt negatively impact bank profitability. 3. **Country-Specific Analysis**: - The impact of bank-specific and macroeconomic determinants varies across countries, with significant effects observed in Belgium, Cyprus, Germany, Greece, Italy, Latvia, Lithuania, Portugal, and Slovenia. 4. **Policy Implications**: - Banks should focus on reducing NPL and CIR, increasing net income from interest, fees, and commissions, and trading assets to improve profitability. - National policymakers can use these findings to enhance bank profitability by managing macroeconomic variables such as GDP, inflation, unemployment, and debt. The study contributes to the literature by introducing two uncommonly used macroeconomic variables (unemployment rate and debt ratio) and providing a comprehensive analysis of bank profitability determinants in the eurozone.This study aims to analyze the factors affecting the profitability of banks in the eurozone and to provide recommendations for enhancing profitability in individual eurozone countries. The research focuses on identifying bank-specific and macroeconomic determinants of profitability and their impact on bank management. Using quarterly data from Eurostat for 18 eurozone countries over the period 2015–2020, the study employs random effects, fixed effects, and generalized method of moments (GMM) models. Key findings include: 1. **Bank-Specific Determinants**: - Non-performing loans (NPL) and cost-to-income ratio (CIR) negatively impact bank profitability. - Net interest income to operating income (NIM), net income from trading assets to operating income (NIT), and net income from fees and commissions to operating income (NIF) positively impact bank profitability. 2. **Macroeconomic Determinants**: - Gross domestic product (GDP) positively impacts bank profitability. - Inflation rate, unemployment rate, and gross government debt negatively impact bank profitability. 3. **Country-Specific Analysis**: - The impact of bank-specific and macroeconomic determinants varies across countries, with significant effects observed in Belgium, Cyprus, Germany, Greece, Italy, Latvia, Lithuania, Portugal, and Slovenia. 4. **Policy Implications**: - Banks should focus on reducing NPL and CIR, increasing net income from interest, fees, and commissions, and trading assets to improve profitability. - National policymakers can use these findings to enhance bank profitability by managing macroeconomic variables such as GDP, inflation, unemployment, and debt. The study contributes to the literature by introducing two uncommonly used macroeconomic variables (unemployment rate and debt ratio) and providing a comprehensive analysis of bank profitability determinants in the eurozone.