IMPACT OF INTELLECTUAL CAPITAL ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN SAUDI ARABIA

This paper seeks to establish the interlinkage, that exists between FP and IC of commercial banks in Saudi Arabia. The study identified ten commercial banks, using the convenience sampling method, covering a six-year span, that included the COVID-19 era. Four regression analyses were conducted, to examine the impact of IC components on the banks'FP. The along with ROA, demonstrated an increasing trend. Regression findings established that the overall IC, as indicated by VAICTM, exerted positive and significant influence, by a 1% significance level, on FP. A scrutiny of IC and financial performance indicators revealed that Capital Employed Efficiency correlated positively and significantly with all the FP indicators, at the 1% noteworthy level but both Structural Capital Efficiency and the Human Capital Efficiency did not report any obvious linkage with the FP indicators. Regarding the size of the firm, it reported no significant relationship with ROA while it established pragmatic linkage with ROE. Further, the Covid-19 impact on FP was significant at 1% level of significance.