Purpose - The purpose of this paper is to evaluate the determinants of bank performance in China. In particular, the paper examines the effects of stock market volatility, competition and ownership on bank performance in China. Design/methodology/approach - The sample comprises a total of 11 banks (four state-owned and seven joint-stock commercial banks) listed in the Chinese Stock Exchanges. The period under consideration extends from 2003-2009. The generalized methods of moments (GMM) difference and system estimators are applied. Findings - Empirical results show that high level of stock market volatility can translate into higher return on equity (ROE) and excess return on equity (EROE). Rather than leading to improved profitability, the labour productivity has a negative impact on economic value added (EVA). Ownership does not have any effect on the profitability of Chinese banking industry. The bank profitability in terms of ROE and EROE is lower in the banking industry with higher competition. When using the GMM with ROE-COC and ROE, the paper finds that high taxation has a negative impact on both state-owned and joint-stock banks, while the capital level is negatively related to joint-stock commercial banks. With regards to the other two performance indicators (EVA and NIM), the result suggests that higher cost efficiency and labour productivity improve the performance of both state-owned and joint-stock commercial banks. Large volume of non-traditional activity is the explanation of poor performance of state-owned commercial banks, while higher credit risk, lower taxation and the mature banking industry are helpful in improving the performance of joint-stock commercial banks. Research limitations/implications - Further research should examine other methods (e.g. the Rosse-Panzar H statistic) to calculate the bank competition in China, and other determinants of bank performance in Asian countries and compare them with these results. Social implications - The current study has relevant policy implications. First, in order to increase the profit earned from the traditional loan-deposit services, the Chinese banks should make loans to the high risk projects or companies, and control the expenses including both the operating and personnel expenses. Furthermore, the government and bank regulatory authority should make policy such as inject capital to SOCBs and write-off NPLs for them to reduce the degree of competition in order to make banks have better performance. Originality/value - Particular emphasis is given on the investigation into the effects of stock market volatility, competition and ownership on bank performance in China while controlling for the most comprehensive bank-specific, industry specific and macroeconomic variables.