The Integrated Model to Measure the Impact of E-Banking on Commercial Bank Profitability: Evidence from Pakistan Rauf Sundas*, Prof. Qiang Fu** *School of Economics and Business Administration, Chongqing University, China **College of Economy and Business Administration, Chongqing University, China Online published on 6 January, 2014. Abstract Fragile accommodation issues which nosed the loan loss and negative growth rate, resulted in terrific economic loss and budget issues in worldwide banking sector. Banks throughout the globe are putting their efforts to cope with these problems enhancing profit share, investments and firing the people to lessen the cost but still it's not a sustainable strategy. In this study, we attempt to develop an integrated model to measure the significant impact of E-banking on profitability of Pakistani commercial banks during the period 2002 to 2012. The study sample comprises of 10 major commercial banks of Pakistan further divided into 2 groups: Recent adopters and early adopters of E-banking services. Dependent variables: Return on Assets (ROA), Return on Equity (ROE) and Margin interest to measure the profitability as well the independent variables: Market Share, Overhead, Deposits/Assets and Loans/Assets ratios of banks are incorporated in the model to apply the regression analysis. The results enlightened that E-Banking has significant impact on profitability of recent adopters of E-banking in terms of Margin, ROE, and ROA. On the other hand, it effects significantly on profitability of the early adopters of E-banking in terms of margin, ROE but slightly on ROA. Overall, there is significant effect on commercial bank profitability. Thus the problem of economic loss can be solved by adopting e-banking services because it helps to expand the market share due to increase in the customer satisfaction by better customer service delivery, security, variety of choices, accessibility and speedy transactions. Using it as cost saving strategy, it guarantees a considerable reduction in the cost of paper work and personnel. Thus adoption of E-banking along with traditional banking by Pakistani banks can be a remarkable strategy to compete with the domestic and International banks as per the conditions of a well-managed monitoring and control over the risks involved in. Top Keywords E-Banking services, Profitability of banks, completive advantage, sustainable strategy. Top |