IMPACT OF INTERNET BANKING ON THE PERFORMANCE OF NIGERIAN BANKS

ABSTRACT

This study examines the impact of internet banking on bank performance in Nigeria. This study specifically examines the long and short run effect from internet transactions and mobile payment transactions on liquidity ratio of banks in Nigeria. The study adopted ex post facto research design. A monthly time series data from January 2009 to June 2017 was used for the econometric analysis. Johansen Co-integration Test, Vector Error correction model, and Wald test were used to estimate the long and short run effect. Econometrics Views (Eviews) version 8.0 statistical Package was used for the analysis. The study reveals that there is a significant long-run effect from internet transactions and mobile transactions to bank liquidity in Nigeria. Secondly, there is a significant short-run effect from internet transactions to bank liquidity in Nigeria but failed to establish a significant short-run effect from mobile transactions to bank liquidity in Nigeria. The study recommends among other things that banks should intensify effort to update and secure the internet transactions for continuous and improved long term benefits. Moreover, the Nigerian banks should improve the awareness and security of the mobile payment system to encourage user to reliably make payments from the mobile phone.

TABLE OF CONTENTS

Cover page ﾿ i

Title page ﾿ ii

Declaration ﾿ iii

Certification ﾿ iv

Dedication ﾿ v

Acknowledgement ﾿ vi

Table of Contents ﾿ vii

List of Tables ﾿ ix

Abstract ﾿ x

CHAPTER ONE: INTRODUCTION ﾿ 1

1.1 ﾿ Background to the Study ﾿ 1

1.2 ﾿ Research Problem ﾿ 2

1.3 ﾿ Objectives of The Study ﾿ 5

1.4 ﾿ Research Question ﾿ 5

1.5 ﾿ Hypotheses ﾿ 5

1.6 Significance of Study ﾿ 6

1.7 Scope of the Study ﾿ 6

CHAPTER TWO: LITERATURE REVIEW ﾿ 7

2.1 Conceptual Framework ﾿ 7

 2.1.1 Types and Delivery Channels of E-Banking ﾿ 8

 2.1.2 Benefits of E-Banking ﾿ 9

2.1.3 Measures of E-Banking and Bank Performance ﾿ 10

2.1.3.1 Capital Adequacy ﾿ 11

2.1.3.2 Asset Quality ﾿ 11

2.1.3.3 Management Quality ﾿ 12

2.1.3.4 Earning Performance ﾿ 12

2.1.3.5 Liquidity ﾿ 12

2.1.3.6 Sensitivity to Market Risk ﾿ 13

2.2. Theoretical Review ﾿ 13

2.2.1 Technology Acceptance Theory ﾿ 14

2.2.2. Theory of Planned Behavior ﾿ 15

2.2.3. The Theory of Reasoned Action ﾿ 16

2.3 Empirical Review ﾿ 17

CHAPTER THREE: RESEARCH METHODOLOGY ﾿ 24

3.1 Research Design ﾿ 24

3.2 Area of Study ﾿ 24

3.3 Nature and Sources of Data ﾿ 24 

3.4 Model Specification ﾿ 25

3.5 Description of Variables ﾿ 26

3.5.1 Dependent variable ﾿ 26

3.5.2 Independent Variables ﾿ 26

3.6 Data Analysis Techniques ﾿ 26

3.6.1 Unit Root Test ﾿ 26

3.6.2 Co-Integration Test:  ﾿ 27

3.6.3 Vector Error Correction Model ﾿ 27

3.6.4 Wald Test ﾿ 27

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND

 INTERPRETATION OF RESULTS ﾿ 28

4.1 Data Presentation ﾿ 28

4.2 Descriptive Analysis ﾿ 28

4.3 Unit Root Test ﾿ 30

4.4 Inferential Statistics, Hypothesis Testing, and Result Interpretations ﾿ 30

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND 

RECOMMENDATIONS ﾿ 40

5.1 Summary of Findings ﾿ 40

5.2 Conclusion ﾿ 40

5.3 Recommendations ﾿ 41

References

Appendix 

LIST OF TABLES

Table 4.1.  Descriptive Statistics of Research Variables ﾿ 28

Table 4.2.  Result of unit root test                                                                                          30

Table 4.3. Johansen Cointegration Test for Hypothesis One ﾿ 31

Table 4.4. Co-integration Equation for Hypothesis One ﾿ 32

Table 4.5. Vector Error Correction Model (VECM) Result for Hypothesis Two ﾿ 33

Table 4.6.  Wald Test Result for Hypothesis Two ﾿ 34

Table 4.7. Johansen Cointegration Test for Hypothesis Three ﾿ 35

Table 4.8. Co-integration Equation for Hypothesis Three ﾿ 36

Table 4.9. Vector Error Correction Model (VECM) Result for Hypothesis Four ﾿ 37

Table 4.10. Wald Test Result for Hypothesis Four ﾿ 3