Title: Intellectual capital profiles and financial performance of Islamic banks in the UK

Authors: Tasawar Nawaz

Addresses: Plymouth Business School, University of Plymouth, Plymouth, PL4 8AA, UK

Abstract: The main contribution of this paper is to report on the impact of intellectual capital (IC) on financial performance of Islamic banks operating in the UK. Two distinct measures, return on average assets (ROAA) and return on average equity (ROAE) are used to measure the financial performance. The paper also controls for number of employees and bank size. Results based on the regression analysis suggest that IC efficiency proxied by the value added intellectual coefficient (VAIC) relates positively with financial performance of Islamic banks in the UK. The analysis further suggests that bank size and number of employees equally contribute in banks' achieving higher financial performance. Additionally, the paper further ghettoises sub-components of IC namely; capital employed, human capital and structural capital to analyse the discrete impact of these IC constituents on financial performance. The analysis of the sub components suggests a positive relationship between physical and financial capital employed efficiency, human capital efficiency and performance.

Keywords: Islamic banking and finance; intellectual capital efficiency; VAIC; value added intellectual coefficient; financial performance; Islamic banks; UK.

DOI: 10.1504/IJLIC.2019.096934

International Journal of Learning and Intellectual Capital, 2019 Vol.16 No.1, pp.87 - 97

Received: 12 Apr 2018
Accepted: 31 Jul 2018
Published online: 13 Dec 2018 *

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