The purpose of this study is to examine the effect of CEO expertise on bank diversification and to analyze the moderating role of competition in this relationship. This research is applied in purpose and descriptive-correlational in method. The statistical population includes banks active in the Tehran Stock Exchange, and based on specific criteria, the financial data of 14 banks were collected and analyzed over a 13-year period (2010–2022). To test the research hypotheses, multiple regression analysis and panel data analysis were conducted using EViews software. The results indicate that CEO expertise has a positive and significant impact on bank diversification, meaning that the more the CEO possesses expertise and knowledge in banking and financial management, the more the bank under their management tends to diversify its activities. Furthermore, the findings show that the level of competition in the banking industry plays a moderating role in this relationship, such that under more intense competition, the positive effect of CEO expertise on bank diversification is strengthened. These results can be valuable for policymakers, bank managers, and shareholders in formulating optimal strategies to improve bank performance and enhance competitiveness.