Effect of Intellectual Capital on Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

This study examined the effect of intellectual capital on the financial performance of listed deposit money banks in Nigeria. The study explored ex-post facto research design. The population of the study is made up of fourteen (14) listed deposit money banks in Nigerian for period from 2012 to 2025. The study employed panel data covering 196 observations, and the fixed effect regression technique was adopted based on the Hausman test result. The empirical findings revealed that human capital has a positive and statistically significant effect on financial performance, indicating that increased investment in employee knowledge, skills, and competencies enhances bank profitability. Structural capital also exhibited a positive relationship with return on assets, although the effect was statistically insignificant. In contrast, relational capital showed a negative but insignificant influence on financial performance, suggesting that customer and stakeholder relationships did not significantly contribute to profitability during the study period. The regression model was statistically significant and explained approximately 73% of the variations in return on assets, demonstrating that intellectual capital is an important determinant of financial performance among listed deposit money banks in Nigeria. The study concluded that effective management of intellectual capital, particularly human capital, is essential for improving the profitability and competitiveness of deposit money banks. It recommended sustained investment in employee development, strengthening organizational systems and innovation, improving customer relationship management practices, and encouraging intellectual capital reporting to support informed decision-making and sustainable performance in the Nigerian banking industry.