An Empirical Evaluation of the Effect of Automated Teller Machines Investment on Cost Efficiency of Banks in Nigeria

Jonathan Oyerinde Adewoye


Banks in Nigeria have increased their investment in ATMs as a major e-banking tool to generate substantial contributions to their operations and financial results. Among the expectations of the banks in deploying and usage of ATMs is improving efficiency particularly cost efficiency. There is, however, no clear evidence of banks achieving the desired returns from ATMs investments in the Nigerian banking environment.

The main objective of this study was therefore to analyze the effect of the intensity of ATMs deployment on the cost efficiency of banks in Nigeria. The study was carried out on twenty two commercial banks quoted by the Nigerian stock exchange in year 2012 from which twenty were selected. Secondary data obtained from the six years financial reports and internal operational records of the banks were analyzed using both descriptive and inferential statistical tools.

In evaluating the effect of ATMs investment on the operating cost rate and Asset management rate of banks in Nigeria, four variables were used, intensity of ATMs as main independent variable and bank size, salary level as well as  non-performing loans being control variables. Intensity of ATMs, bank size and salary level were found significant.

The result revealed that the intensity of ATMs deployment made positive contribution to the cost efficiency of Nigerian banks.



Information and Communication Technology (ICT), Automated Teller Machine (ATM), ATM investments, ATM intensity , Cost Efficiency

Full Text:




  • There are currently no refbacks.