Intellectual Capital and Financial Performance in Sharia Commercial Banks in Indonesia

Abstract

This study measures the value-added intellectual coefficient (VAICTM) for the efficient performance of Islamic banking in Indonesia. In addition, this study examines the relationship between the efficiency of Intellectual Capital and Financial Performance. This paper uses secondary data collected from quarterly reports for 2015-2020 on BUMN Islamic Banks; BNI Syariah, BRI Syariah, and Bank Mandiri Syariah. Data analysis using SEM (Structural Equation Modeling) using Partial Least Square (PLS) analysis. The results of this study found that the efficiency of human capital (VAHU) was higher than the structured capital (STAVA) and the efficiency of employee capital (VACA) used. Furthermore, this study found that intellectual capital affects the financial performance of Islamic banks. The findings provide empirical evidence that optimal utilization of IC and resources leads to higher bank profitability. Therefore, this finding can be useful as Islamic banks wishing to improve their financial performance can focus on improving their IC.