ICT and the Performance of Lebanese Banks: A Panel Data Analysis

Abstract

This study explores the impact of information and communication technology (ICT) on the performance of 25 Lebanese commercial banks for the period between 2000 and 2014. Unlike previous studies, this study uses a panel data analysis to assess the effect of the number of Internet users and domain registrations in Lebanon on the performance of the banks. Results reveal that there is a positive statistical significant relationship between ICT and the performance of the banks. Moreover, the capital adequacy ratio, the size of the bank, the growth rate of the gross domestic product and the lending interest rates were found to have a positive impact on the performance. We conclude that a higher level of ICT use is an important factor that determines commercial banks’ profitability as it supports the commercial work of the banks and enables them to achieve a better performance.