Download this complete Project material titled; Impact of Electronic Banking on Profitability of Commercial Banks in Nigeria with abstract, chapters 1-5, and references. Preview abstract and chapter 1 below

  • Format: PDF and MS Word (DOC)
  • Size: [56.9KB]
  • Length: [55 Pages]
  • project material guide


Impact of Electronic Banking on Profitability of Commercial Banks in Nigeria


Chapter 1


The impact of electronic banking on profitability of commercial banks in Nigeria are explored in this research work. For years, banks have been providing electronic services to individuals and companies via the internet. Banks are regarded as early adopters of technology as well as the primary movers of the technological revolution. Small payments and corporate cash management systems, as well as publicly accessible automated devices for currency withdrawals and retail account management, are all global mainstays. However, as the internet becomes more widely accepted as a delivery channel for banking products and services, it opens up new business options for both banks and clients. At the same time, these new opportunities come with both dangers and rewards. In the past few years, banking activities in Nigeria have increasingly depended on the development of Information and Communication Technology (ICT). ( Rafiu Oyesola Salawu and Mary Kehinde Salawu, 2007).Thus, electronic banking is the delivery of a wide range of value-added products and services to bank customers using electronic and communications networks. Electronic banking is the application of information technology to banking processes. Electronic banking, according to some authors, is a product of ecommerce in the sector of banking and financial services. Banks also provide payment services on behalf of their consumers who shop at various e-commerce sites. Electronic banking can be seen in this study as a manner in which banks are able to use various tools such as Automated teller machine (ATM), Points of sales machine (POS), mobile banking to maximize profits in their various organizations. The prospects of reducing the cost of operations revenue actually is seen as a motivator in the investment in internet banking by banks according to Simpson, J. (2002).

In most research papers studied the most appropriate way to measure the profitability of commercial banks would be to use the return on asset (ROA), return on equity (ROE) and return on investment (ROI). Another good way to measure profit is through the time series analysis. Ayanda (et al., 2013) stresses profitability is defined as the bank’s capacity to generate profit year after year. Return on assets (ROA) is the ratio of Net Income After Taxes (NIAT) divided by Total Assets. The ROA signifies managerial efficiency in other words it depicts how effective and efficient the management of banks has been as they seek to transform assets into earnings. The higher ratio is an indication of higher performance of the banks. It is a useful tool for comparing profitability of one bank with other or even the whole commercial banking system.  (Njogu,2014)

Both banks and customers have reaped various benefits from electronic banking services. The first benefit for banks that provide electronic banking services is improved branding and market reaction. Those banks that provide this service will be seen as pioneers in the field of technology deployment. As a result, their brand image would improve. The other advantages are measurable in monetary terms. electronic banking services have provided numerous benefits for both banks and customers. Among the numerous benefits of electronic banking to banking institutions are : 1) it provides way for international banking 2) It provides convenience in terms of capital, labor, time all the resources needed to make a transaction. 3) There is less data entry as applications are completed and processed online by customers. All of these various benefits are among reasons why banks in Nigeria have adopted electronic banking in Nigeria.


An extreme view speculates that the Internet will destroy old models of how bank services are developed and delivered (DeYoung, 2001a). The broad availability of electronic banking is projected to have an impact on the mix of financial services offered by banks, the method in which these services are produced, and the financial performance of these banks as a result. Whether or not this extreme viewpoint proves to be right, and whether or not banks use this new technology, will be determined by their evaluation of the profitability of such a delivery system for their services. However, no recent research has been able to identify the large costs of maintaining a lot of these systems put in place such as cost of maintaining ATM, POS and constant update of software. This study sought to fill the existing research gap by answering the research question: does electronic banking affect profitability of commercial banks in Nigeria.



This main objective of this study will be to examine the impact of electronicbanking on profitability of commercial banks in Nigeria. While some other objectives will be :

  • To examine the relationship between mobile banking service expenditure and the profitability of commercial banks in Nigeria.
  • To examine the relationship between automated teller machine (ATM) service expenditure and the profitability of commercial banks in Nigeria
  • To examine the relationship between point of sales terminals (POS) service expenditure and the profitability of commercial banks in Nigeria.

In light of the objective of the research, The following questions were found to be relevant to the research activity being done in light of the aims described below:

  • What effect does mobile banking have on the profitability of commercial banks in Nigeria?
  • What effect does point of sales machine have on the profitability of commercial banks in Nigeria?
  • What effect does Automated teller machines have on the profitability of commercial banks in Nigeria?



The hypothesis to be carried out in the study are:


Ho: There is no significant relationship between electronic banking and commercial bank profitability.

H1: There is a significant relationship between electronic banking and commercial bank profitability.


  Ho: Electronic banking decreases profitability of commercial banks.

H1: Electronic banking increases profitability of commercial banks




This study seeks to understand the relationship between electronic banking and profitability of commercial banks. This study will aid commercial banks in determining if the cost of putting up a technological environment and properly training people to be able to carry out their responsibilities thoughtfully surpasses the income earned by them. This research will also assist bank management in better understanding and cultivating customer relationships, as the introduction of electronic banking has made life easier for many consumers.  The findings of the study will inform banking policymakers about the predicted impact of electronic banking on bank profitability, which will aid them in developing appropriate policies for commercial banking’s adoption of electronic banking in Nigeria. Lastly, the results of this study will add to the existent body of knowledge when it is successfully concluded.


The scope of this research tends to focus on the impact of electronic banking on profitability of commercial banks in Nigeria. This study makes use of annual reports and financial statements published by first bank Nigeria limited. The biggest limitation to this study was time limitation thus leading the researcher to not be able to cover all the banks in Nigeria. In Nigeria currently there are 22 commercial banks according to the central bank of Nigeria and thus selecting only first bank Nigeria as they were one of the earliest adopters of electronic banking in Nigeria.


The research methodology that was used in carrying out this study outlined collection, analyses, sources and interpretation of the data. The methodology involves research design, sample population, sampling size and sampling procedures, method of data collection including data sources and data collection methods, method of operationalization of variables in data analysis, and model specification. This study makes use of secondary data gotten from the annual reports released by First bank Nigeria.


Electronic banking: Electronic banking is a sort of banking in which funds are exchanged via electronic signals rather than cash, checks, or other types of paper papers. Electronic banking is based on intricate computer systems that communicate over phone lines.

AUTOMATED TELLER MACHINES (ATM): Automated teller machines (ATMs) are electronic banking outlets that allow people to complete transactions without going into a branch of their bank. Some ATMs are simple cash dispensers while others allow a variety of transactions such as check deposits, balance transfers, and bill payments.

POINT OF SALES TERMINAL (POS):  A point-of-sale (POS) terminal is a hardware system for processing card payments at retail locations. Software to read magnetic strips of credit and debit cards is embedded in the hardware. Portable devices (i.e., not terminals anchored to a counter), either proprietary or third-party, as well as contactless capabilities for emerging forms of mobile payments, represent the next generation of POS systems.

MOBILE BANKING SERVICE: Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet.


In this chapter, the research study’s introduction is explained. It includes a description of the research variables as well as the definitions of important terms used in the analysis. It lays out the statement of problem for the research project, as well as the study’s goals and objectives, and what it hopes to accomplish, which is to examine the effect of electronic banking on profitability of commercial banks in Nigeria. To accomplish this goal, research questions and hypotheses were developed to facilitate the research investigation. It is critical to state and explain the significance of a study, as well as what it attempts to add to existing knowledge and its scope, as well as any potential limits encountered throughout the research.


Do you need help? Talk to us right now: (+234) 08060082010, 08107932631 (Call/WhatsApp). Email: [email protected].


Disclaimer: This PDF Material Content is Developed by the copyright owner to Serve as a RESEARCH GUIDE for Students to Conduct Academic Research.

You are allowed to use the original PDF Research Material Guide you will receive in the following ways:

1. As a source for additional understanding of the project topic.

2. As a source for ideas for you own academic research work (if properly referenced).

3. For PROPER paraphrasing ( see your school definition of plagiarism and acceptable paraphrase).

4. Direct citing ( if referenced properly).

Thank you so much for your respect for the authors copyright.

Do you need help? Talk to us right now: (+234) 08060082010, 08107932631 (Call/WhatsApp). Email: [email protected].

Welcome! My name is Damaris I am online and ready to help you via WhatsApp chat. Let me know if you need my assistance.