Economics and Business
ISSN 2775-9237 (Online)
Published: 08 May 2020
Electronic Banking and Profitability: Empirical Evidence from Selected Banks in Nigeria
Nkiru Peace Nwakoby, Janefrances N. Okoye, Raymond A Ezejiofor, Chika C. Anukwu, Augustina Ihediwa
Nnamdi Azikiwe University, Nigeria
Download Full-Text Pdf
Keywords: ATM Payment, POS Payment, Mobile Payment and Return on Equity
This study examines the link between electronic banking and profitability of Nigerian deposit money banks. The study adopted Ex post facto, research design. A sample size of 9 deposit money banks in Nigeria were employed from the population of 15 banks quoted on the Nigerian Stock Exchange. Data was collected from annual reports and accounts of the sampled banks and CBN Statistical bulletins for the periods from 2009 to 2018. The study employed regression analysis to test the formulated hypotheses with aid of E-View 9.0. Based on the data analyzed, the followings were revealed; that Automated Teller Machine (ATM) payment method has negative effect on return on equity of deposit money banks in Nigeria and this effect is not statistically significant; that Point of Sales (POS) payment methodmethodsitive effect on return on equity of deposit money banks in Nigeria and this effect is not statistically significant and that Mobile banking Payment (MPAY) has positive effect on return on equity of deposit money banks in Nigeria and this effect is statistically significant. It recommended that Nigerian banks should embark on sensitization programme to education their customers on ATM usage.
Abaenewe, Z.C, Ogbulu, O.M, Ndugbu, M.O (2013). Electronic banking and bank performance in Nigeria. West Afri. J. Industrial and Acad. Res.6(1), 171-187.
Akhisar, I., Tunay, K. B., & Tunay, N. (2015). The effects of innovations on bank performance: The case of electronic banking services. Procedia Social and Behavioural Sciences,195: 369 – 375.
Adewoye, J. O. (2013). Impact of mobile banking on service delivery in the Nigerian commercial banks. International Review of Management and Business Research, 2 (1): 333 –344.
Auta, M. E. (2010). E-banking in developing economy: empirical evidence from Nigeria. Journal of Applied Quantitative Methods. 5(2).
Al-Smadi, M.O. & Al-wabel S.A. (2011). The impact of electronic banking on the performance of Jordanian Bank. Journal of Internet Banking and Commerce 16(2).
Azeez, K. (2011). Fresh hurdles for CBN cashless economy plan.
Bingilar, P.F. & Bariweni, B. (2019). Electronic payment systems implementation and the performance of commercial banks in Nigeria.EJBMR, European Journal of Business and Management Research 4(5)
Chimaobi, C. M. (2018). Impact of internet banking on profitability of commercial banks in Nigeria: A Study of Zenith Bank Plc (2005-2017). Department of accounting and finance, faculty of management and social sciences Godfrey Okoye University Ugwuomu Nike, Enugu.
Eze, G. P. & Egoro, S., (2016). Electronic banking and profitability of commercial banks in Nigeria. Journal of Finance and Economic Research3(1);ISSN: 2251-015X.
Ekwueme, C.M, Egbunike, P.A, Okoye, A. (2012). An empirical assessment of the operational efficiency of electronic banking: Evidence of Nigerian banks. Review of Public Administration and Management, 1(2), 76 -110.
Gonzalez, M. E. (2008). An alternative approach in service quality: an e-banking case study. Quality Manage. P. 43.
Husni, A. K., & Noor, M. A. S. (2011). The impact of e-banking on bank profitability: empirical evidence from Jordan. Middle Eastern Finance and Economics, 13: 142 –158.
Igbara, F. Egbrenini, F & Daasi, G. (2015). The Impact of cashless policy on small scale business in Ogoni Land of Rivers state, Nigeria”. Journal of Economics and Finance6(3),33-38.
Josiah, A., & Nancy, K. (2012). The relationship between electronic banking and financial performance among commercial banks in Kenya. Journal of Finance and Investment Analysis, 1 (3): 99 – 118.
Kelvin, O. (2012). Mobile money for financial inclusion. Journal of Macro Finance, Africa4(14).
Khrawish HA, Al-Sa'di NM (2011). The impact of e-banking on bank profitability: Evidence from Jordan. Middle Eastern Finance and Economics, 13, 142-158.
Krick, T. (2009). CARTA & Caribbean Group of banking supervisors. IT workshop for regional bank examiners. International Journal of Small Business Management, 4(10), 51-84.
Maiyo , J (2013), The effect of electronic banking on financial performance of commercial banks in Kenya, Unpublished MBA Project University of Nairobi.
Malhotra, P. & Singh, B.(2007). Determinants of internet banking adoption by banks in India. Emerald Internet Research, 2(3), 323-339.
Njogu, J. N., (2014). The effect of electronic banking on profitability of commercial banks in Kenya. A research project submitted in partial fulfillment of the requirements for the award of the degree of Master of Science in finance, school of business, university of Nairobi.
Nnolim, C. G. (2013). Impact of information and communication technology on the banking sector. A case study of Access Bank, Enugu. Research project submitted to the Department of Banking and Finance, Caritas University, Amorji – Nike, Enugu.
Njuru, J, N (2007), Challenges in implementing electronic banking strategy by commercial banks in Kenya, Unpublished MBA Project University of Nairobi
Okon, A. N. & Amaegberi, M. A., (2018). Mobile banking transactions and bank profitability in Nigeria. International Journal of Economics, Commerce and Management. United Kingdom VI (6).
Olasope, T. (2013). Electronic banking as an aid to commercial bank operations in Nigeria. Research project submitted to the Department of Banking and Finance, Caritas University, Amorji – Nike, Enugu.
Ovia, J. (2001). Internet banking practices and potentials in Nigeria. Paper delivered at a workshop organized by Institute of Chatered Accountants of Nigeria at Lagos.
Obiri-Yeboah K, Kyere-Djan R, Kwarteng KA (2013). The role of information technology on banking service delivery: A perspective from customers in Ghana. Intern. J. Innov. Res. Manag. 2 (6), 1-12.
Obiekwe, C. J. & Mike,A. (2017). Electronic payment methods and profitability of banking firms in Nigeria: A Panel Data Analysis.International Journal of Finance and Accounting, 6(3): 67-74. DOI: 10.5923/j.ijfa.20170603.01.
Ogare, H, O (2013),The effect of electronic banking on the financial performance of commercial banks in Kenya, Unpublished MBA Project, University of Nairobi.
Oginni, S. O., Mohammed, A., El-maude, J. G., Abam, A. I., (2013). E-banking and Bank Performance: Evidence from Nigeria. International Journal of Scientific Engineering and Technology 2(8), (ISSN : 2277-1581) pp : 766-771.
Oloyede, I., Azeez, S. & Aluko, A (2015). Assessed the benefit of e-commerce and e-banking to the Nigerian economy.”.International Journal of management science2 (1), 1-5
Offei M.O, & Nuamah-Gyambrah, K. (2016). The contribution of electronic banking to customer satisfaction: A case of GCB bank limited–Koforidua. Intern. J. Manag. Inform. Technol. 8(1), 1-11.
Omose, K. (2011). Deconstructing CBN cashless policy. Retrieved from the website:
Salehi M, & Alipour M (2010). E-banking in emerging economy: empirical evidence of Iran. Intern. J. Econ. Finan. 2(1), 201-209.
Surendran, P. (2012). Technology acceptance model: A survey of literature. Intern. J. Bus. Soc. Res. 2(4), 175-178.
Shehu, U. H., Aliyu, M., & Musa, A. F. (2013). Electronic banking products and performance of Deposit Money Banks. American Journal of Computer Technology and Application,1(10): 138 – 148.
Singhal, D & Padhmanabhan V. (2008). A study on customer perception towards internet banking identifying major contributing factors. The Journal of Nepalese Business Studies,5(1), 101-111.
Suberu, O A. A., Akande, S. & Adeyinka, A.(2015). Effect of cashless policy, savings and Bank Credit on Nigeria Deregulated Economy‟‟. Journal of Emerging trends in Economics and management sciences6(2) 144-150.
Taiwo, J.N, & Agwu, M. E., (2017). The role of e-banking on operational efficiency of banks in Nigeria.Basic Research Journal of Business Management and Accounts. ISSN 2315-6899, 6(1) pp. 01-10.
Tijani, J.A. & Ilugbemi, A.O. (2015). Electronic payment channels in the Nigeria banking sector and its impacts on national development, Asian Economic and Financial Review, 5(3): 521-531.
Ugbede, J. T., Yahaya, A. & Edicha, M. J., (2019). Effect of electronic payment on financial performance of deposit money banks in Nigeria. Lafia Journal of Economics and Management Sciences (LAJEMS) 4(1). ISSN: 2550 -732X 114.
Ugwueze, A. C. & Nwezeaku, N. C., (2016). Banking and commercial bank performance in nigeria: a cointegration and causality approach.International Journal of e-Education, e-Business, e-Management and e-Learning. 6(3).
Wali,A. Wright, L. & Reynolds, P. (2014). Cashless system, users‟ perception and retail marketing performance in Nigeria, International Journal of Sales Retailing and Marketing3(4), 17-32.
Yunus, A. S., & Waidi, A. A. (2011). Technology innovation and Nigeria banks performance: The assessment of employee’s and customer’s responses. American Journal of Social and Management Sciences, 3(1): 13 – 18.