This study assesses the profitability of EU banks during 2010–2021 on three levels: 1. determining factors, 2. differences between the former communist countries and the core-capitalist countries, and 3. the myth of banking profitability and its relationship with populism. Profitability is examined from the perspectives of return on assets and return on equity. As determinant factors of profitability, we consider endogenous and exogenous indicators reflecting credit risk, operational efficiency, market size, market concentration and competition, demand evolution, capital adequacy, and inflation. Populism is considered relevant as a proxy for legislative risk and perceptions about the banking industry. The overall negative perception of the industry is attributed to the belief in the so-called exaggerated profitability, leading to consistent and significant legislative initiatives that generally restrict the development of banking finance. The analysis is structured around the banking industries of EU countries and then the two major groups within the EU: former communist countries and Western countries. The significance level of profitability determinants supports the existence of significant gaps between the banking systems of the former communist bloc and Western countries. Populism disproportionately impacts profitability in Eastern economies compared to their Western counterparts. The study additionally engages in per-industry comparative analysis of profitability measures.