Abstract
This paper examines the impact of information technology on bank profitability. Using a sample comprising one-quarter of the banks in Nigeria currently quoted on the Nigerian Stock Exchange, regression results were in conflict with a priori expectations, which indicated that information technology spending in the study period had no significant impact on future operating performance. The results remained robust irrespective of alternative measures of profitability. This surprising outcome, among other things, is likely connected with the fact that investment in information technology is now a common denominator for all banks and that the data set is from a sub-Saharan African country where investment in information technology by banks is not yet at its prime level. However, what the results show is that information technology investment is inevitable for banking institutions to enable them to continue to operate efficiently in the current competitive banking industry.
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