The effect of a balanced scorecard on the Profitability of Islamic and Conventional Banks

Abstract

This study examines the impact of the various dimensions of the balanced scorecard, namely financial perspectives, customers’ perspectives, learning and growth perspectives, and internal business process perspectives, on the profitability of Islamic and conventional banks operating in Palestine. The survey included thirteen banks that perform in Hebron district, where this study targeted the branch managers and their deputies, supervisors and heads of departments in these banks, where one hundred and ten questionnaires were distributed, one hundred and five questionnaires were recovered due to the loss of some of them with bank employees, This is what makes up 96% of the study sample, and the study concluded several results, the most important of which are: there was a fairly strong and statistically significant direct relationship between (the financial and customer dimension) and the banks' profitability, and there was a weak and statistically significant inverse relationship between the two dimensions (internal processes, learning and growth) and the profitability of the banks operating in Palestine. Therefore, the researcher came to a set of recommendations, the most important of which are: The banks operating in Palestine should develop tools to measure their performance to improve their profitability and find out the reasons that led to the existence of the inverse relationship between the internal processes and after growth and learning with the profitability of the banks and try to address it