This study examines the impact of bond markets on both bank profit and cost efficiency. To do so, we employ the stochastic frontier approach and utilize a large micro-dataset of 926 banks from 27 Asia-Pacific economies in 2004-2017. We find that both bond market development and bond market structure are relevant to bank efficiency. Bond market development generally has a positive (negative) effect on bank profit (cost) efficiency. Given the level of a country's bond market development, increasing the proportion of corporate bonds will enhance both bank profit and cost efficiency. Moreover, given the level of corporate bond market development, a higher share of local-currency corporate bonds is significantly and positively related to both bank profit and cost efficiency. In addition, increasing the share of bank-issued corporate bonds in corporate bond market significantly increases (decreases) bank profit (cost) efficiency. Overall, our results point to the significant contribution of local-currency corporate bonds to overall bank efficiency. Our findings have important implications for both policy makers and bank management.