The article explores how market concentration affects the profitability of Lithuanian banks from 2007 to 2013. It looks at how competition or monopoly in the banking sector can impact a bank's ability to make a profit. The study uses measures like the Herfindahl-Hirschman index and bank concentration ratio to analyze market concentration, and indicators like return on assets and return on equity to measure profitability. The research shows that the Lithuanian banking sector is highly concentrated, with foreign-owned banks dominating the market. This concentration has a significant influence on the performance and profitability of banks in Lithuania during the specified period.