Intellectual Capital on Financial Performance: Islamic Commercial Banks in Indonesia 2021-2025

Abstract

This study aims to examine the influence of intellectual capital on the financial performance of Islamic commercial banks in Indonesia during the 2021–2025 period. Intellectual capital has become increasingly relevant to banking performance, as financial institutions rely on employee expertise, organizational capabilities, and efficient capital utilization to sustain profitability. In Islamic banking, understanding the contribution of these resources is particularly important given the need to maintain financial performance while operating under Sharia principles. This study evaluates intellectual capital through Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE), as well as their combined contribution using the Value Added Intellectual Coefficient (VAIC). Financial performance is measured by Return on Assets (ROA). A quantitative approach was employed using quarterly financial data from nine Islamic commercial banks, comprising 180 balanced panel observations. The data were analyzed using panel regression with appropriate model selection and heteroscedasticity correction procedures. The findings show that HCE, SCE, and CEE each have a positive and significant relationship with ROA. The aggregate VAIC measure also exhibits a significant positive relationship with bank profitability. These findings indicate that human capital, organizational resources, and capital utilization are important determinants of financial performance in Islamic banking. This study contributes to the literature by providing empirical evidence on the role of individual intellectual capital components and the aggregate VAIC measure in explaining the profitability of Islamic commercial banks in Indonesia.