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Banking is the basic steering of the economy of any country, for its role in economic development by attracting investments and diversifying resources, which necessitates the adoption of the cutting-edge technologies and cost systems in measuring and evaluating performance to keep pace with developments and compete with international banks. The research aims to demonstrate the role of the performance-focused activity-based costing system (PFABC) in evaluating banking performance and giving a comprehensive review of the performance activities, by clarifying what this system provides of integrated information on the actual and standard costs that are distributed according to the consumption of resources. Al-Rasheed Bank / Electricity Department branch was chosen as the subject of research. The researcher adopted the deductive approach in the theoretical aspect and the inductive approach in the practical aspect. The research has come up with several conclusions. The application of the (PFABC) system leads to a fairer calculation of costs on activities than the standard accounting system currently adopted in the bank. This in turn leads to raising the efficiency and efficacy of the bank performance.