||This project deals with both theoretical and empirical aspects of banks’ performance in terms of profitability in the European Union and the United States. The last decade was characterized by protracted period of very low, in some countries even negative, interest rates commonly known as zero lower bound (ZLB). This situation has serious implication for banks’ performance putting their net interest margin under pressure and encouraging them to seek for new sources of non-interest income. The aim of this project is to consider the determinants of net interest margin (NIM) and banks’ profitability in general in situation of ZLB and resulting changes in behaviour of the yield curves. Moreover, the project will focus on observing differences caused by bank heterogeneity by size, by bank specialisation, or by differences arising from specific market characteristics, which include institutional design of the market, e.g. bank-based vs. capital-based financial markets. The results of the project will be published in impacted journals and presented at international conferences. We suppose that the results will be relevant also for the practitioners.