Internet Banking in Terms of Profitability: The Case of Northern Cyprus Banks

ABSTRACT: In Northern Cyprus, many if not all different bank services are being provided for their customers. Banking activities on the small Island in rather perfect and it is very flexible in satisfying and meeting the persistent wants of the general public. Currently, North Cyprus banks have gone ahead of traditional ways of banking. Newer products and services are being developed through electronic ways or electronic platforms (online banking), by using different delivery channels to reach the end users. The principle aim of this study is to analyze the empirical test of whether banks offering Internet banking are profitable, and to help fill essential space in knowledge concerning profitability, cost efficiency and other characteristics based on Banks perspectives for adopting internet banking system A panel data from 22 retail banks operating in Turkish Republic of Northern Cyprus (KKTC), comprising of 1 Public Bank, 14 Private Banks and 7 Foreign Branch Banks. These banks have adopted Internet banking some time between 1997 and 2010. Our dataset is drawn from the year-end aggregate income statements and balance sheets compiled by the Central Bank of Northern Cyprus. It covers a period of six years ranging from 2004 to 2009. Keywords: Profitability, internet banking and North Cyprus ……………………………………………………………………………………………………………………………………………………………………………………………………………………