The Effect of Electronic Banking on Bank Performance in Nigeria

Amos Olushola Michael ,Ekpe Mary-Jane ,Kolawole Babajide ,Umar Halidu Ahmad ,Busari Adekunle Hakeem

doi:10.7176/ejbm/12-26-09

Abstract

This study ascertains the effect of electronic banking on bank performance in Nigeria. The study utilized secondary data derived from the audited annual financial statement of the deposit money banks quoted on the Nigerian Stock Exchange from 2008–2017. The study also made use of journals, textbooks, Nigerian Stock Exchange fact books, the Central Bank of Nigeria (CBN) Bullions and other published materials. Using the multiple regression analysis techniques, the findings revealed that e-banking measured by return on equity (ROE), return on assets (ROA), and earnings per share (EPS) has no significant impact on the performance of banks in Nigeria. With the findings, we can conclude that investment in electronic banking has not improved the performance of deposit money banks in Nigeria. The study recommends that for effectiveness in electronic banking, there should be rigorous campaign and awareness for clients to patronise the facilities. Keywords: Electronic Banking, Bank Performance, Deposit Money Bank, Nigerian Stock Exchange, CBN, ICT DOI: 10.7176/EJBM/12-26-09 Publication date: September 30 th 2020

Highlights

Nigerian banks have moved away from a manual system to an automated method of banking
In 2004, the Central Bank of Nigeria (CBN) initiated a reform that has to do with consolidation and recapitalization of the banking sector in Nigeria primarily to reduce the number of deposit money banks in the system and to make the emerging banks stronger, reliable and to be able to compete internationally
1.3 Research Hypotheses The following hypotheses formulated in their null form will be tested: Ho1: Electronic banking has no significant effect on the return on asset Ho2: Electronic banking has no significant impact on the return on equity Ho3: Electronic banking has no significant effect on earnings per share

Summary

Introduction

Nigerian banks have moved away from a manual system to an automated method of banking. Banks in Nigeria are constantly involved in all forms of information management irrespective of whether they are automated or not (Ovia, 2001). The art of a customer performing banking transactions electronically without physically paying a visit to any financial institution is known as electronic banking. It is the electronic delivery of banking products and services directly to customers wherever they are and could either be in form of internet banking, virtual banking, online banking, personal computer (PC), home banking, remote ebanking or phone banking. The banking sector in Nigerian has witnessed several regulatory and institutional reforms which are primarily meant to raise the standard and performance of the sector. There were massive challenges in the banking sector such as fraudulent practices and corruption, erosion of public confidence, low asset quality, low capital base, repeated cases of failures, distress, etc. ( Auta, 2010)

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