IMPACT OF INTERNET BANKING ON PROFITABILITY OF COMMERCIAL BANKS IN NIGERIA (A CASE STUDY OF FIDELITY BANK 2012 - 2016)

ABSTRACT Using Fidelity Bank PLC as a case study, this research examined the effect of online banking on Nigerian commercial banks' profitability from 2020 to 2024. It specifically examined the effects of online banking on key profitability indicators such as return on equity (ROE), return on assets (ROA), and net profit margin (NPM). The study used secondary data from Fidelity Bank's audited financial statements and other publications, and it used an ex-post facto research approach. Descriptive statistics were used to highlight trends in profitability and internet banking adoption, while inferential analysis using multiple regressions was applied to assess the relationship between internet banking usage and profitability outcomes. The findings revealed that internet banking adoption grew consistently over the study period and exhibited a strong positive correlation with all three profitability indicators. ROE, in particular, demonstrated a statistically significant effect, suggesting that increased digital banking usage contributed substantially to shareholder value. ROA and NPM also improved year over year, although their statistical significance was less pronounced. Overall, the results affirm that digital banking innovations have enhanced the bank’s operational efficiency, customer satisfaction, and financial performance. The study concludes that internet banking remains a critical driver of profitability in the Nigerian banking sector. As customers increasingly embrace digital platforms, banks that invest in user-friendly, secure, and innovative technologies stand to achieve higher returns and maintain a competitive edge. It is therefore recommended that commercial banks intensify efforts in expanding and optimizing their internet banking infrastructure to sustain growth and profitability in a rapidly evolving digital economy.