THE EFFECTS OF E-BANKING ON BANK PERFORMANCE: THE CASE OF SOME SELECTED ETHIOPIAN COMMERCIAL BANKS

Abstract

The main objective of this study is to examine the effect of e-banking on the performance of commercial banks in Ethiopia. The study adopted a quantitative research approach with an explanatory design. ROA was used to measure and explain the performance of selected commercial banks. The explanatory variables were TP, NDCU, and NMBU. Secondary data was collected in panel form for 15purposively selected commercial banks from NBE and audited financial statements of commercial banks for 5 years (2017-2021). penal regression models were adopted to examine the relationship between the study variables. Data was analyzed using descriptive statistics using SPSS software. The finding of the study confirmed that from bank-specific variables value of TP had significant and positive effects on the financial performance of commercial banks in Ethiopia measured by return on asset. On the contrary NMB and NDC had a significant negative impact on financial performance measured by return on asset.The finding generally concludes that the Number of TP was the main contributor of bank profitability in Ethiopia measured by ROA. The study recommends that Banks should invest more on new e-banking channel for automating their banking system and it is imperative to devise strategies that involve alliances and collaborations between commercial banks, since e-banking requires promising activity to increase the profitability of Ethiopian commercial Banks fascinatingly.