The IUP Journal of Bank Management
Performance Evaluation of Banks in Bhutan: An Application of Balanced Scorecard Approach

Article Details
Pub. Date :Feb, 2019
Product Name : The IUP Journal of Bank Management
Product Type : Article
Product Code : IJIT31902
Author Name : Aaditya Pradhan and Krishna Murari
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 15



The performance of an organization in the modern era is not only measured by its financial parameters, but also by other key non-financial indicators. The Balanced Scorecard (BSC) approach is extensively used to have a holistic view of how the firm is performing in terms of financial and non-financial aspects. This study tries to compare the performance of banks operating in Bhutan using BSC. The two oldest banks in Bhutan, i.e., Bank of Bhutan Limited (BOBL) and Bhutan National Bank Limited (BNBL), are chosen for performance evaluation. The data collected for this study is from secondary sources and the analysis is done using descriptive statistics, t-test, and Compounded Annual Growth Rate (CAGR) for the four key perspectives of BSC, i.e., financial, customer, internal business process and learning and growth. The results reveal that the performance of BOBL is comparatively better than BNBL under all perspectives of BSC. However, the results show that BOBL is lagging in internal business process perspective of BSC. Therefore, it is important for BOBL to concentrate more on improving its performance on internal business process perspective.


In recent times, performance measurement system has gained importance because of cutthroat competition not only in business world, but also in financial services sector. A performance measurement system works as an information system that enables an organization to establish a communication channel between all the organizational units. This helps the organization in formulating organizational targets. Performance measurement system also provides input and output measures. Input measures track the resources that an organization uses to provide a service such as number of bank branches, number of employees, or the number of buildings operated in or ATMs installed. Output measures are indicators of the amount of service provided such as the number of accounts opened, the amount of loans and advances disbursed, or the investment made by the banks.


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