The aim of banking sector and the aim of each and every bank is to realize profit. But banking management means also the influence on the society which comprises a variety of things such as quality in basic business function, environment protection, employee and consumer treatment, as well as the treatment of the wider community and the positive interaction with all interest groups. Corporate social responsibility (CSR) is a modern business practice being applied in an increasing number of companies in the world as well as in Croatia since it has been noticed that socially responsible companies become more successful and more competitive. This thesis tries to explore the relationship between the level of application of the CSR and the competitive advantage of one of the leading banks in Croatia. One of the ways to achieve the competitive advantage is to apply the CSR in all aspects of banking management as the means of differentiation. The competitiveness achieved by means of the CSR is difficult to copy and it creates a unique perception of a company which serves to build reputation. A survey which included both bank employees and clients has been conducted and proved the existence of the relationship between the CSR and the competitive advantage of the bank when it comes to human resources, investing in community and ecology.