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Does Electronic Banking Really Improve Bank Performance? Evidence in China

Author

Listed:
  • Shaohua Yang
  • Zeyun Li
  • Yaxin Ma
  • Xingxing Chen

Abstract

This study investigated the performance of Chinese banks following the full adoption of e-banking system, particularly in profitability and cost efficiency performance. The study became more important with the development of e-banking and internet because of increased penetration of e-banking which has redefined the banking operations in China and in globe. Secondary method was adopted in this study. The report and data of five banks in China were used for sample analysis. The bank performance was measured in terms of return on assets (ROA), return on equity (ROE), operating margin (OM), net interest margin (NIM) and efficiency ratio. With the data collected, the different performance means between development stage and developed stage of e-banking in China were compared. The study revealed that e-banking could improve the Chinese bank performance in terms of ROA, ROE, and OM. On the contrary, e-banking has a slight impact on Chinese bank performance with respect to NIM and efficiency ratio. The findings of this study were to provide banks with suggestions for e-banking adoption for banking operations.

Suggested Citation

  • Shaohua Yang & Zeyun Li & Yaxin Ma & Xingxing Chen, 2018. "Does Electronic Banking Really Improve Bank Performance? Evidence in China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(2), pages 82-94, February.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:2:p:82-94
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    References listed on IDEAS

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    Cited by:

    1. Tianlang Xiong & Zhishuo Ma & Zhuangzhuang Li & Jiangqianyi Dai, 2022. "The analysis of influence mechanism for internet financial fraud identification and user behavior based on machine learning approaches," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 13(3), pages 996-1007, December.
    2. Vesselin Blagoev & Elena Shustova, 2019. "The National Culture Effect on the Adoption of Internet-Banking," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 19-38.
    3. Thabit Altobishi & Gizem Erboz & Szilard Podruzsik, 2018. "E-Banking Effects on Customer Satisfaction: The Survey on Clients in Jordan Banking Sector," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 10(2), pages 151-161, June.
    4. Hai Yen Hoang & Ngoc Vu & Linh Nguyen, 2021. "Do female leaders influence bank profitability and bank stability? Evidence from Vietnamese banking sector," Economics and Business Letters, Oviedo University Press, vol. 10(3), pages 262-273.
    5. Uchenna Aduaka & Olawumi Dele Awolusi, 2020. "Electronic Banking and Profitability in the Nigerian Banking Industry," Information Management and Business Review, AMH International, vol. 12(2), pages 20-37.
    6. Riris Shanti & Hermanto Siregar & Nimmi Zulbainarni & Tony, 2023. "Role of Digital Transformation on Digital Business Model Banks," Sustainability, MDPI, vol. 15(23), pages 1-25, November.
    7. Md. Imran Hossain, 2021. "Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh," Information Resources Management Journal (IRMJ), IGI Global, vol. 34(4), pages 1-20, October.
    8. Md. Imran Hossain, 2021. "Effects of E-Banking Adoption on the Financial Performance of State-Owned Commercial Banks in Bangladesh," Information Resources Management Journal (IRMJ), IGI Global, vol. 34(4), pages 93-112, October.
    9. Iwa Kuchciak & Justyna Wiktorowicz, 2021. "Empowering Financial Education by Banks—Social Media as a Modern Channel," JRFM, MDPI, vol. 14(3), pages 1-22, March.

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    More about this item

    Keywords

    e-banking; bank performance; banking adoption; banking operation;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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