This paper investigates the determinants of the patterns of banks’ foreign investment using a unique database of 260 large banks from OECD countries. Consistent with previous research, we ﬁnd that high integration between the home and destination countries affects the location choice. However, institutional characteristics and measures of potential proﬁt opportunities in the destination countries are more important than economic integration; they affect differently the decision between opening a branch or acquiring a subsidiary. Proﬁt opportunities are a key factor especially affecting subsidiaries, so are lower regulatory restrictions. On the other hand, ﬁnancial centers attract branches but not subsidiaries.