Palestine Technical University Research Journal


This study aimed at identifying the impact of the financial inclusion on the performance of conventional banks according to an analytical study using the American Banking Evaluation System (CAMELS) model during the period (2011-2014-2017). The study population included the conventional banks listed in Palestine stock exchange, and it was a comprehensive survey of all the study population. To achieve the objectives of the study, the researcher followed a descriptive analytical approach using the financial analysis and the multiple linear regression analysis. Moreover, the study concluded a number of findings, the most important are: The conventional banks provide a performance ranges between strong and satisfactory in light of growing financial inclusion in Palestine, where capital adequacy (13.8-31%), assets quality (1.9-6.4%), returns (0.8-1.7%) and sensitivity (2.5-9.9%) record strong and satisfactory rating, while the management quality (25.7-34.8%) is equivalent to performance and between serious and strong is the liquidity (49.7-66.2%). In addition, there is a statistical impact for the financial inclusion on the performance of conventional banks ratio of 41.5% and on the sub variables with the impact ratio: (capital adequacy 38.3%, assets 58.3%, management 55.8%, earning 33.2%, liquidity 77.9% and sensitivity to market risks 87.5%). Moreover, there is a statistical impact for the independent variables of the financial inclusion, adults having official accounts and the number of ATMs, on the conventional banks. While there is no impact for the savings, borrowings and the number of branches. Furthermore, the study recommended developing financial products suitable for the excluded groups according to Islamic law according to the pioneering funders' thoughts. Moreover, the monetary authorities should intervene to take corrective monitoring procedures to strengthen the liquidity position of the National Bank and Bank of Palestine. Additionally, the banking administrative of Al-Quds Bank and the Palestine Investment should take correct administrative procedures to consider the inflation of administrative expenses. Finally, there is a need to adopt the (CAMELS) model by the monetary authorities to assess the performance of banks and disclosing the results in its annual reports.