Abstract
This paper focuses on the electronic banking transactions and how these transactions affect the performance of banks. Using a series of proxy variables for e-banking adoption, the study seeks to verify how the implementation of e-banking by commercial banks affects the profitability of the banks. The data for the study was got from the financial records of selected commercial banks in Cameroon as well as from the data base of the Central bank of Cameroon (BEAC), between 2006 and 2018. In analyzing the data, regression analysis method was used to determine the impact of MMT, ATM, PPV, IFR, and DTF on the ROA of the banks. Other analytical methods used include, correlation analysis and descriptive analysis. The findings of the study reveal that MMT, DTF and EPT all have positive impacts on ROA, while PPV and IFR have negative impacts on the ROA of the banks. The overall results however indicate that e-banking transactions have a significant impact on the profitability of banks. The study recommends that banks should increase the level of direct participation into the Mobile banking market. In addition, the commercial banks should increase international transfer transactions, Electronic payment terminals as well as improve on the level of e-banking technology and innovation. Key words: Electronic Banking, Performance, Commercial banks, Cameroon DOI: 10.7176/RJFA/11-8-11 Publication date: April 30 th 2020
Highlights
The Cameroon banking sector is the largest in the CEMAC sub region representing about 52% of the overall banking sector of the region
Deposits and investments were greatly reduced which had a negative effect on the system resulting to numerous shocks on the banking system? This explains why by 1980s the banking system underwent massive crisis which led to the liquidation of most of the existing banks in the system.As part of the consequence,between 2012 and 2016 a number of acquisitions and merger took place within the Cameroon banking sector; Union Bank of Cameroon (UBC) merged with Oceanic Bank 75% / 25%( 3:1) shares ownership
By 2016, due to some operational difficulties, Oceanic bank share was acquired by Ecobank Cameroon which remains the same situation till date
Summary
The Cameroon banking sector is the largest in the CEMAC sub region representing about 52% of the overall banking sector of the region. The study by Fonchamyo on e-banking in Cameroon is limited given that it focuses only on perception and behaviour of customers towards adoption of e-banking and does not evaluate the effects on the profitability of the banks. 1.407.This results imply that a 1unit increase in mobile money transactions of banks leads to 1.41 drop in the ROA
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