Corporate Social Responsibility for Banks Operating in Palestine and its Relation to Profitability رسالة ماجستير

Abstract

The purpose of this study is to identify the extent of applying corporate social responsibility (CSR) for the operating banks in Palestine and its relation to profitability. To achieve this purpose, four areas of corporate social responsibility have been discussed. These areas are the responsibility towards employees, market place, community, and environment. This study investigates the profitability situation of banking industry in Palestine during the period 2012-2016 using profitability indicators (return on asset, return on equity, net profit margin and earnings per share). In addition, the correlation between CSR and profitability indicators is examined. Finally, the study aims to find out if there are any differences in the application of CSR between the banks according to the year of establishment, numbers of employees, CSR motive, the application of corporate social responsibility in the organizational structure, the level of education, experience and specialization by answering the following main question: To what extent is CSR being applied in Banks operating in Palestine, and what is its relation to profitability? To achieve the objectives of the study, the researcher used a descriptive methodology; a survey was conducted in order to measure their social responsibility by distributing (50) questionnaires to banks managers in regional administrations where only (43) were retrieved, that is, (86%) of the population, and with respect to financial information derived from the annual reports available on websites. financial information derived from the annual reports available on websites. VII The result reveals that there is a high level of commitment by banks working in Palestine on the issue of social responsibility; the social responsibility towards market place was the highest, followed by the responsibility towards community, then the responsibility towards employees, and finally the responsibility towards the environment. Also, the study finds out a weak positive correlation between CSR and profitability (ROA, ROE, NPM, and EPS). Finally, the result showed that there is no difference in the application of CSR between Banks due to the year of establishment, numbers of employee, CSR motive, the application of corporate social responsibility in the organizational structure, and the level of educational experience and specialization. The study comes out with several recommendations that are directed to the three relevant parties; some are directed to banks such as the need of banks to move forward in social responsibility activities through voluntary projects related to employees and community like establishing housing projects for employees and infrastructure projects. Others are directed to the government such as conducting an awareness campaign to explain the concept of social responsibility, dimensions and principles. The final recommendation is directed to community institutions such as identifying a comprehensive concept of social responsibility to suit the social and economic reality of the Palestinian community.