Banking profitability has been a theme of study in many countries. In Brazil, research on this area has been concentrated in studying banking spread, usually testing economic variables as drivers. The present study has the aim of finding the determinants of bank profitability in Brazil, measured by return on assets (ROA) and return on equity (ROE) by testing economic, accounting and operating factors as explanatory variables. Using a sample with the 50 largest banks and considering the data referring to end-of-semester financial statements from December 2000 to December 2009, we test nine research hypotheses. The results, estimated in panel data by the method of GMM show that bank profitability is not entirely contemporaneous since it presents inertial behavior (relationship with its lagged value) and also a statistically positive and relevant relationship with the economy’s basic interest rate, with the level of economic activity, with the level of tax burden, with the institutions’ operating efficiency, and with the relative participation of domestic banks as expected. We also found a negative relationship with changes in the exchange rate, which diverges from the a priori expectations. Additionally, we show that bank profitability holds a relationship with the level of inflation, which is positive or negative depending on the model utilized. However, we could not find relevant relationships between bank profitability and the level of compulsory deposits and cash holdings, neither with the relative participation of state-owned versus privately-owned banking institutions. The results obtained with ROE or ROA as alternative proxies for profitability are virtually equivalent, which gives robustness to the outcomes. Key words: banks, profitability, financial institutions, ROA, ROE.