Impact of intellectual capital on financial performance of Vietnamese commercial banks

Abstract

This paper investigates the impact of intellectual capital on financial performance of Vietnamese
commercial banks in the period from 2012 to 2021. By using the Fixed Effect Model (FEM) combined with
a dataset of 26 banks with 260 observations, the research results indicate that the increase of intellectual
capital will improve the financial efficiency of the bank through interest income and profit. On the other
hand, income and profit affect the bank’s cash flow, thereby showing that intellectual capital can have
indirect influence on the intrinsic value of the bank. Among the components of intellectual capital, capital
employed has the highest correlation with operational efficiency, hence Vietnamese commercial banks
need to prioritize their investment in equipment, facilities and infrastructure, following by the development
of systems, processes, data, etc., which will contribute to the robust development of intellectual capital and
thereby improve the financial efficiency of banks