EFFECT OF IB-VAIC COMPONENTS ON THE FINANCIAL PERFORMANCE OF ISLAMIC BANKING IN THE PERIOD 2013-2023

This study aims to analyze the effect of the Islamic Banking-Value Added Intellectual Capital (iB-VAIC) components on the financial performance of Islamic commercial banks in Indonesia, as measured by Return on Assets (ROA). The iB-VAIC components consist of iB-VACA (Value Added Capital Employed), iB-VAHU (Value Added Human Capital), and iB-STVA (Structural Capital Value Added). The data used is panel data from 8 Islamic commercial banks and 8 sharia unit business during the 2013–2023 period. The analysis method employed is panel data regression using the Random Effect Model (REM), selected based on the Chow, Hausman, and Lagrange Multiplier tests. The results show that iB-VACA has a positive and significant effect on ROA, while iB-VAHU and iB-STVA do not have significant effects. These findings indicate that the efficiency of physical capital utilization is the main factor influencing the profitability of Islamic banks. This study implies that the management of intellectual capital, particularly financial capital, should be a strategic focus in efforts to sustainably improve the financial performance of Islamic banking. Keywords: iB-VAIC, ROA, Islamic Commercial Bank, Sharia Unit Business