The financial system of any country provides the catalyst through financial intermediation for productive activities to ensure economic growth and development. The Nigerian financial sector is undoubtedly the most important in the political-economic systems; because, it provides the necessary lubricant that keeps the wheel of the economy turning and it is an engine for economic growth. Electronic banking is the use of electronic and telecommunication networks to deliver a wide range of value added products and services to bank customers. The use of information technology in banking operations is called electronic banking. Electronic banking is a product of e-commerce in the field of banking and financial services. In what can be described as Business-to-consumer (B2C) domain for balance enquiry, request for cheque books, recording stop payment instruction, balance transfer instruction, account opening and other forms of traditional banking services. Banks are also offering payment services on behalf of their customer who shop in different e-shops.

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Internet-banking is the provision of banking services to customers through the internet it includes the provision of retail and small value banking products and services through electronic channels as well as a large value electronic payment and other wholesale banking services delivered electronically.
Almost all banks in Nigeria and all over the world offer online, real-time banking services. Banks that are not able to brace up to this new development are rapidly losing their customers. Online, real-time banking system has now become commonplace as customers are offered the ease of operating an account in any branch of their bank’s network.
INTERNET BANKING
Internet banking uses technology and brings the bank closer to the customer. Internet banking refers to systems that enable bank customers to get access to their accounts and general information on bank products and services through the use of bank’s website, without the intervention or inconvenience of sending letters, faxes, original signatures and telephone confirmations. If one has access to the internet and a computer all they need to do is proceed to their banks website and login. From there they have access to all of their accounts that they have at bank. Transfer funds between accounts with ease. One can also use online banking to see how much money they have in their accounts and can also trace all their transactions.
Internet banking has changed manual and traditional ways of operating business in the banking sector and is being replaced by the highly appealing technology which is based on automation and interconnection of computers and other electronic gadgets in such a way that paper invoice, ledger books, printed materials and business trips have all been replaced with online billings and payments, elaborate website with product notification and real-time teleconferencing across continents and time zones. The e-banking is changing the banking and financial sector in terms of the nature of core products or services and the way these are packaged, suggested, delivered and consumed. E-banking is a powerful and invaluable weapon pivoting development, supporting growth, elevating innovation and improving competitiveness
PROFITABILITY
Profitability is a measurement of efficiency – and ultimately its success or failure. A further definition of profitability is a business's ability to produce a return on an investment based on its resources in comparison with an alternative investment.
Profitability is also ability of a company to use its resources to generate revenues in excess of its expenses. In other words, this is a company's capability of generating profits from its operations.

There are four key areas that can help drive profitability. These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency. You can also expand into new market sectors, or develop new products or services.
DETERMINANT OF PROFITABILITY IN BANKS
A) RETURN ON EQUITY (ROE):
Return on equity (ROE) is a closely watched financial ratio among equity investors. It is a strong measure of how well the management of a firm creates value for its shareholders. This particular strategy could be very cost-effective in the emerging markets where financial data is not readily accessible.
It is a measure of financial performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets. ROE is considered a measure of a corporation's profitability in relation to stockholders’ equity.
B) RETURN ON ASSET (ROA):
Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's management is at using its assets to generate earnings.
Return on Assets (ROA) is a type of return on investment (ROI) metric that measures the profitability of a business in relation to its total assets. This ratio indicates how well a company is performing by comparing the profit (net income) it’s generating to the capital it’s invested in assets. The higher the return, the more productive and efficient management is in utilizing economic resources.
Since company assets’ sole purpose is to generate revenues and produce profits, this ratio helps both management and investors see how well the company can convert its investments in assets into profits. You can look at ROA as a return on investment for the company since capital assets are often the biggest investment for most companies. In this case, the company invests money into capital assets and the return is measured in profits.
INTERNET BANKING AND PROFITABILITY IN BANKS
The gyration of information technology has influenced almost every aspect of life, among them is the banking sector. Introduction of electronic banking has revolutionized and redefined the ways banks were operating. As technology is now considered as the main contribution for the organizations’ success. So the banks, be it domestic or foreign are investing more on providing the customers with the new technologies through internet-banking.
The availability of internet banking is expected to affect the mixture of financial services produced by banks, the manner in which banks deliver these services and the resulting financial performances of these banks. Whether or not this extreme view proves correct and whether banks take advantage of these new technologies will certainly depend on their assessment of the profitability of such a delivery system for their services. Industry analysis outlining the potential impact of internet banking on revenue growth, risk profile and cost savings of the banks have also generated notable interest and speculation about the impact of the Internet on the banking industry. In fact, E-Banking eliminates physical and geographical boundaries and limitations of banking services.
CONCLUSION
The introduction of E-banking has indeed had a positive effect on the profitability of the bank since it was introduced. It has also improved the banks customer relationship by rendering effective services. However, network failure from internet connection and the break-down of ATMs are major challenge facing customers using e-banking.