The study aimed to clarify the impact of external economic variables (inflation, growth and stock- market indicator), on the financial performance of the Conventional and Islamic banks, Also, the study makes a comparison between the Islamic and Conventional banks in Jordan. Statistically used E-views program to test the hypotheses. The study finds that there is a statistical significant effect of all the external economic variables on the performance of the Conventional banks. As for the Islamic banks, there was no statistical significant impact of inflation. The study recommends that conventional banks work to reduce dependence on interest rates in their investment activities.
