Intellectual Capital, Financial Profitability, and Risk: An Empirical Study of the Indonesian Islamic Banks Raihani Fauziah (a*), Ira Novianty(b)
a) b) Master of Applied Islamic Finance and Banking, Bandung State Polytechnic, Bandung 40559, Indonesia
Abstract
This research aims to analyze the influence of Intellectual Capital (IC) on the overall performance of Indonesian Islamic Banks during the 2013-2022 period. The independent variable in this research is IC, which includes Value Added Capital Employed (VACA), Value Added Human Capital (VAHU), and Structural Capital Value Added (STVA). The dependent variables are ROE (ROE) and Non-Performing Financing (NPF). The control variables are Leverage and Size. This analysis uses panel data regression with Structural Equation Model Partial Least Square (SEM-PLS), implemented using WarpPLS 8.0 software. The results indicate that IC significantly influences the performance of Indonesian Islamic Banks. Among the three indicators used to measure IC, VACA impacts both ROE and NPF, VAHU does not affect ROE or NPF, and STVA only affects NPF but not ROE. Overall, IC influences both profitability and risk in Indonesian Islamic Banks. These findings are expected to contribute to the literature by providing insights into IC management and offering input for policy and strategic decisions in Islamic banking.
Keywords: Intellectual Capital- Profitability- Risk- Islamic Bank
