This paper explores service quality in a retail bank setting in Slovenia and its influence on customer satisfaction. In previous studies both SERVQUAL and SERVPERF scales have been used for measuring service quality. Based on SERVPERF a 28-item scale has been developed for this study. Through factor analysis four dimensions of service quality have been obtained. The results from regression analysis suggest that all four dimensions of service quality as well as service range influence customer satisfaction. The information provided by this research can be used when designing marketing strategies to improve customer satisfaction in retail banking.