In this paper, we demonstrate that the impact of non-interest income on bank risk significantly differs between retail- and investment-oriented banks. More specifically, while savings banks, cooperative banks and other retail-oriented banks sector will be less risky (in the sense of having a higher Z-Score) if they increase their fee income share, investment-oriented banks will be significantly more prone to risk. The latter do not only generate a higher share of their operating income from non-traditional activities, but also differ significantly from retail-oriented banks in terms of their activities. Both might limit the potential benefits from diversifying into non-interest income for investment-oriented banks. Overall, therefore, our paper implies that it is important to distinguish between retail- and investment-oriented banks when drawing general conclusions regarding the impact of non-interest income on bank risk.