The Effect of Human Resources, Management and Capital
Performance toward Return on Asset
Case Study on Islamic Bank 2011-2015
Dian Filianti and Dina Fitrisia Septiarini
Islamic Economy Department-Economy and Business Faculty-Airlangga University, Indonesia
Keywords: CAR, Good Corporate Governance, iB-VAIC, Intellectual Capital, Islamic Banking, Return on Asset.
Abstract: The purpose of this study is to determine the effect of intellectual capital partially and simultaneously with
iB-VAIC, the quality of GCG implementation, and capital adequacy level towards ROA (a case study Islamic
bank during 2011-2015). The results showed that partially intellectual capital with iB-VAIC and capital
adequacy level significantly affect the ROA, while the GCG quality do not significantly affect ROA.
Simultaneous research results showed that intellectual capital with iB-VAIC, quality of GCG implementation
and the capital adequacy level significantly affect ROA. Therefore, the management of intellectual capital or
resource management with a good knowledge and quality management of GCG supported by sufficient capital
to support the operations of the company will be able to increase the ROA of Islamic banks.
1 INTRODUCTION
Islamic banks are banks which have different
operational from the conventional bank. One of the
Islamic bank characteristics is not receiving or
burdening their customer with interest, however
receiving or burdening profit sharing and other
rewards according to the covenant. The concept of
Islamic Bank is based on Quran and hadith. All the
products and services offered must not be in
contradiction with Quran and hadith from Rasulullah
SAW (Ismail, 2011: 29).
1.1 Stakeholder Theory
In the context of explaining about IC concept, the
stakeholder theory must be seen from both sector,
either ethics (moral) or managerial sector. The ethics
sector argued that every stakeholder has the right to
be treated equitably by the organization, also manager
must manage the organization for the importance of
every stakeholder (Deegan, 2004 in Ulum, 2009:
5&6). In the context of a relationship between IC and
financial performance, the stakeholder theory is more
appropriate as the main basis to explain the
relationship of IC and company performance. From
the stakeholder theory point of view, the company has
stakeholders, not only shareholder (Riahi-Belkaoui,
2003 in Ulum, 2009: 8).
1.2 Resource-Based Theory
According to Resource-Based Theory, IC fill the
criteria as unique resources to create competitive
superiority for the company by creating value added.
The value added is in the form of the better
performance in the company.
1.3 Intellectual Capital
According to Sawarjuwono and Kadir (2003), IC is
the amount of what is produced by the three main
elements of an organization (human capital, structural
capital, customer capital) which is related to
knowledge and technology that enables the company
to provide more value to a company in the form of
organization competitive superiority.
Frequently, the term of intellectual capital is
treated as a synonym of intangible assets.
Nevertheless, the definition proposed by OECD is
quite different by putting intellectual capital as a
separate part from the intangible asset basic
determination as for the overall company. Therefore,
there are items of an intangible asset which logically
is not a part of the intellectual capital of the company.
124
Filianti, D. and Septiarini, D.
The Effect of Human Resources, Management and Capital Performance toward Return on Asset - Case Study on Islamic Bank 2011-2015.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 124-130
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

One of it is company reputation. Company reputation
may be the side result (or a consequence) from IC
wisely utilization in the company, but it is not a part
of intellectual capital (Ulum, 2009: 21).
1.4 iB-VAIC (Islamic Banking Value
Added Intellectual Coefficient)
On his research, Ulum (2013) formulated IC
performance assessment model for Islamic banking
which will be named iB-VAIC (Islamic Banking
Value Added Intellectual Coefficient) which is
important to be generated as a modification of an
existing model, VAIC (Value Added Intellectual
Coefficient). VAIC is designed to measure the
intellectual capital performance of companies with
common types of transactions. Meanwhile, Islamic
banking has their own type of transactions which are
quite different from common or conventional
banking. The three formula to calculate iB-VAIC as
follows:
The first stage is calculating Islamic Banking
Value Added (iB-VA). iB-VA is calculated as the
difference between output and input. Output (OUT)
is presented as revenue and covers the entire product
and services that sale on market, however input (IN)
cover all the load used to gain revenue. The most
important thing on this method is the labor expenses
are not included on IN. As their active role in the
value creation process, the intellectual potential
(which is represented with labor expenses) is not
calculated as cost and not included on IN component.
iB-VA=OUT– IN.......................................(1)
Notes:
OUT (Output): Total income, obtained from Islamic
activity net income = Islamic activity main operation
income + other operational income - third parties'
right on sharing profit and temporary syirkah funds.
The second stage, calculating Islamic Banking
Value Added Capital Employed (iB-VACA). The
formula used is:
iB-VACA=


........................................(2)
Notes:
CE: Capital Employee: available funds (total
liquidity)
The third stage, calculating Islamic Banking
Value-Added Human Capital (iB-VAHU).
iB-VAHU =


........................................(3)
Notes:
HC: Human capital: labor expenses
The fourth stage, calculating Islamic
Banking Structural Capital Value Added (iB-STVA).
iB-STVA =


.......................................(4)
Notes:
SC: Structural Capital: iB-VA - HC
The fifth stage, calculating iB-VAIC:
iB-VAIC = iB-VACA + iB-VAHU + iB-
STVA...............................................................(5)
Kamath in Ulum (2009: 92) classifying bank
performance according to the Intellectual Capital into
four categories:
Table 1: Category VAIC
TM.
VAIC value Cate
g
or
y
>3 To
p
Per
f
ormers
2.00-2.99 Good Per
f
ormers
1.50-1.99 Common Performers
<1.5
B
ad Performers
Source: Ulum (2013).
1.5 Good Corporate Governance (GCG)
Bank Indonesia Regulation (PBI) No.
11/33/PBI/2009 defines GCG as a bank governance
that applies transparency, accountability,
responsibility, professionalism, and fairness.
1.6 Islamic Corporate Governance
According to Muneeza and Rusni (2014) the
definition of shariah corporate governance or
commonly referred to Islamic corporate governance
is:
"Shari'ah corporate governance is the Islamic
version of corporate governance. This is the
simplest way to explain what Shari’ah corporate
governance is.”
The purpose of definition aforementioned about
shari’ah corporate governance is Islamic corporate
governance. This is the simplest way to explain what
is Shari’ah corporate governance.
1.7 Islamic Bank Capital Management
Capital is the most important factor for bank
development and improvement also maintain the
The Effect of Human Resources, Management and Capital Performance toward Return on Asset - Case Study on Islamic Bank 2011-2015
125

public trust. Every creation of assets, as well as
potentially making a profit also potentially causing a
risk. Therefore, the capital has to be used to maintain
the possibility of risk of loses on assets investment,
especially funds from third parties or public
(Muhammad, 2004: 210).
1.8 Bank Capital Adequacy
Capital adequacy is the most important thing on
business banking. Banks who have good capital
adequacy level indicates a healthy bank. Because
bank capital adequacy indicating its state that
represented by a specific ratio called capital adequacy
ratio (CAR).
1.9 Islamic Bank Finance Performance
On traditional management, the size of performance
which often used is finance performance, because it
is a easiest factor to measure. Profitability is the most
appropriate indicator to measure the bank
performance. The size of profitability on banking
industry which often used is Return on Assets (ROA)
(Rivai, 2009: 686).
1.10 Model Analysis
Figure 1: Model Analysis. Source: Various sources,
processed.
Based on the explanation above, the regression
equation:
Y = a + b1X1 + b2Xz + b3X3 ........................ (6)
2 METHODS
This research was conducted with a quantitative
approach where the research data in the form of
numbers and analyzed using statistic tool.
According to the hypothesis and model analysis, the
variable in this research consists of the dependent
variable and independent variable, i.e.:
The independent variable in this research is the
intellectual capital with iB-VAIC (X1), GCG
Implementation Quality (X2), and capital adequacy
level (X3).The dependent variable in this research is
Return on Asset (Y).
The types of data used in this study are
secondary data. The data comes from an annual report
from 2011 to 2015 that have been published on the
website of each of the selected banks. The samples
are selected using purposive sampling technique.
There are 10 selected Islamic banks in total.
After selecting the sample and determining the
variables used in this study, the next step that should
be done is processing the data using regression
analysis to test the hypothesis. To assist the research,
the researcher will process the statistical data using
software Eviews version 8. The data analysis
technique in this research is regression models for
panel data analysis. The regression models for panel
data analysis is a combination of time series and
cross-section data.
According to Wibisono (2005) in Ajija, et al
(2011: 51), pooled data is a combination of time
series and cross-section data. By accommodating the
information either related to the cross-section
variables or time series, panel data substantially
reduces the omitted-variables problems, which
disregards the relevant variable.
According to Ajija, et al (2011:51) there are 3
approaches used to estimate the regression model for
panel data, i.e.: Common Effect/Polled Least Square
(PLS), Fixed Effect Model (FEM), and Random
Effect Model (REM). There are 2 approaches which
frequently used to determine the best model for this
research, i.e.: Chow test and Hausman test.
3 RESULTS AND DISCUSSION
3.1 Panel Data Estimation Model
Selection
Steps to get the precise model by conducting the
Chow Test and Hausman Test
Intellectual Capital
with iB-VAIC
The quality of GCG
Implementation
Capital Adequacy
Level
ROA
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
126

Table 2: Chow Test.
Effects
Test
Statistic d.f Prob.
Cross-
section F
9.288185 (9,37) 0.0000
Cross-
section
Chi-s
q
uare
59.075444 9 0.0000
Source: Eviews 8.
The probability value (Cross-section F) obtained
from Table 2 of 0,0000 which means that probability
value (Cross-section F) less than α (0,05) so H0 is
rejected and H
1
is accepted.
Table 3: Hausman Test.
Test
Summary
Chi-Sq.
Statistic
Chi-Sq. d.f. Prob.
Cross-
section
random
57.387396 3 0.0000
The probability value (Cross-section random)
obtained according to Table 3 of 0,0000 which less
than α (0,05) means that H
0
is rejected and H
1
is
accepted, can be concluded that Fixed Effect Model
(FEM) is the best model to use better than Random
Effect Model (REM).
Based on the selection result of panel data model
above, it can be concluded that the best analysis
method to analyze panel data on this result is Fixed
Effect Model (FEM). The result from Fixed Effect
Model (FEM) can be explained in Table 5.
(FEM) better than Pooled Least Square/Common
Effect Model (CEM).
Rejected and H1 is accepted, it can be concluded
that the best temporary model to use is Fixed Effect
Model
Table 4: Fixed Effect Model (FEM) Estimation Result.
Based on the estimation result in Table 4, the
linear equation can be written as follow:
ROA=-0,076970 + 0,021553IBVAIC +
0,005992GCG + 0,000862CAR ........................... (7)
3.2 The Effect of Partially Intellectual
Capital with iB-VAIC toward
Return on Asset of Islamic Bank
The result showed that intellectual capital variable
which is calculated using iB-VAIC partially
significant difference toward return on asset of
Islamic bank in Indonesia. It can be seen from the
probability value (t-statistic) that the number is
0,0000. The significance value is less than 0,05 so the
H01 is rejected an Ha1 is accepted and can be
concluded that intellectual capital variable with iB-
VAIC is partially significant difference toward the
return on asset of Islamic bank period 2011-2015.
This indicates that intellectual capital with iB-
VAIC has an important role to improve the return on
asset of an Islamic bank. The higher the value of
intellectual capital with iB-VAIC (Islamic Banking
The Effect of Human Resources, Management and Capital Performance toward Return on Asset - Case Study on Islamic Bank 2011-2015
127

Value Added Intellectualgv Coefficient) of an Islamic
bank, the higher it will create a value-added for the
bank. Value added is a competitive superiority which
able to improve the return on assets of the bank.
This strengthens the stakeholder theory by Ulum
(2009: 6), who states that when the manager able to
manage the organization maximally, especially in the
attempt to create value for the company, it means that
manager has been filling the aspect of both ethics and
theory. The context of value creation is by utilizing
all the company's potential, either employee (human
capital), physical capital, or structural capital. The
well the management of all this potential, the more it
will create value added for a company which able to
encourage the company financial performance for the
importance of stakeholder. The result of this study
also support the resource-based theory that the good
resource management will increase the value added
of company in order to compete in business industry.
This result supports the research conducted by
Ulum (2007) who concluded that intellectual capital
positively significant difference toward the company
performance now and in the future (ROA, ATO, and
GR). This research also support the research
conducted by Chen et al. (2005) in Ulum (2009:101)
if the utilization of intellectual capital is good, the
company profitability will increase so the company
performance will be better. Therefore, the company
ability to gain profit with the total assets owned will
increase if the company able to maximizing the
intellectual capital performance.
The knowledge into company's resources are
inherent knowledge and owned by each people on the
company which able to use to the importance of
company. Those knowledge resources are abstract
and often called as intangible assets or intellectual
capital. Those resources are more potentially provide
the competitive superiority than tangible resources
(Nasih, 2012). Nowadays in order to facing the
competition, knowledge has an important role. As
already explained by Quran on surah Ar-Rahman 33:
Ya
̅
ma
̒
syaral-jinni wal-insiinistata
̒
tum an tanfużu
̅
min
aqta
̅
ris-sama
̅
wa
̅
tiwal-ardifanfużu
̅
,
la
̅
tanfużu
̅
nailla
̅
bisulta
̅
n
O jinn and mankind if you are able to pass beyond
the regions of heavens and earth, then pass. You will
not pass except by authority from Allah (Ministry of
Religious Affairs, 2010: 532).
3.3 The Effect of Partially Good
Corporate Governance
Implementation toward the Return
on Asset of Islamic Bank.
This result showed that GCG implementation
variable calculated from self-assessment result of
GCG implementation in the form of composite value
is not partially significant difference toward return on
assets of Islamic bank in Indonesia. It can be seen
from the probability value (t-statistic).
According to the data, it can be seen that the
probability level (t-statistic) of 0,2890. That
significance value is higher than 0,05 so H01 is
accepted and Ha1 is rejected. According to
Permatasari and Retno (2014), the GCG composite
value had no significant difference on ROA of
Islamic bank so it can be concluded that good
implementation of the bank did not guarantee the
improvement of the bank performance.
This research also supports the research which
already conducted by Permatasari and Retno (2014).
The research conducted by Permatasari and Retno
showed that GCG implementation quality does not
affect the bank performance. Meanwhile, this result
rejects the research conducted by Tjondro and Wilopo
(2011) who stated that GCG had a positive effect
toward the profitability of the banking company.
The GCG implementation quality will be better if
the GCG composite value is low. It means, the better
of bank governance implementation then the better of
bank performance. However, the good GCG
implementation does not guarantee the bank ROA
performance as the result of this research which
showed that the quality of GCG implementation does
not partially significant difference toward ROA of an
Islamic bank.
For instance, Victoria Islamic Bank on 2014 had
a composite value of 1,930 and already applied the
good GCG implementation. However, the ROA of
Victoria Islamic Bank on 2014 suffered loss of -
0,0187. This loss because too cautious in distributing
fund so its distribution is not frontal which led to the
decline of profit. Furthermore, Victoria Islamic Bank
on 205 had a high composite value of 3,000 it means
the GCG implementation of Victoria Islamic Bank is
quite good. However, the ROA of Victoria Islamic
Bank on 2015 suffered loss of -0,0236. The decline of
ROA because the less of cautious in distributing
funds, so a lot of financing problems which led to the
decline of profit.
The implementation GCG quality is a company
operational activity mechanism to run in accordance
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
128

with the company mechanism. From the research
above, the good GCG implementation is not
guaranteed to improve the ROA of the bank. The
ROA improvement affected by several factors, one of
it is profit. If there are a lot of Islamic Bank which is
lost during this period also the possibility about other
factors and variables that are not examined make this
research is not significant.
3.4 The Effect of Capital Adequacy
Level Partially Toward the Return
on Assets of Islamic Bank
The result showed that capital adequacy level variable
which is calculated using CAR had partially
significant difference toward ROA of Islamic bank in
Indonesia. It can be seen from the probability value
(t-statistic). According to the data, it can be known
that probability level (t-statistic) of 0,0009. That
significance value is higher than 0,05 so H01 is
rejected and Ha1 is accepted. Therefore, the higher
CAR of Islamic bank the higher Bank capital ability
to maintain the possibility of business activity loss
risk so the ROA of Islamic bank will increase.
This research also supports the research which
already conducted by Pasaribu and Rosa (2011). The
research result conducted by Pasaribu and Rosa
showed that the capital adequacy level by Capital
Adequacy Ratio (CAR) was significant difference
toward the return on assets. However, it is not
accordance with research conducted by
Widyaningrum (2015). The research conducted by
Widyaningrum showed that CAR was not significant
difference toward ROA.
CAR is the most important thing for a bank in
order to develop its business and accommodate the
loss also reflect the health of bank which aims to
maintain the public trust about banking, protect the
public funds and to fulfill the Islamic Bank
standard.The most important capital factor to run the
bank operational activity and for support their needs,
with the quality of management to maintain the
banking activity to get the expected profit level. With
a proper management, the bank will keep increasing
their capital and pay attention to capital health
indicator, i.e.: CAR, so that the profitability will
increase.
In the implementation of a business or good
resources management also the good company
governance without support from sufficient capital
make business will not run properly. Capital is one of
the important things on Islamic bank. Without capital,
the bank can not to run they're daily operational, the
public trust and support their needs.
3.5 The Influence of Intellectual Capital
with iB-VAIC, GCG
Implementation, and Capital
Adequacy Level Simultaneously
toward the Return on Assets of
Islamic Bank
This result showed that intellectual capital with iB-
VAIC, GCG implementation quality, and capital
adequacy level are simultaneously significant
difference toward ROA. It can be seen from the
probability value (F-statistic). According to the data,
it can be known that probability level (F-statistic) of
0,000000. That significance value is higher than 0,05
so H01 is rejected and Ha1 is accepted.
The intellectual capital with iB-VAIC, GCG
implementation quality, and capital adequacy level
which well and consistently maintained able to
improve the return on asset of a company. It showed
that intellectual capital which efficiency maintained
to indicate that such bank able to well maintain their
resources, the well-maintained resources will
increase the employee ability so this ability will
contribute to enhancing the company performer and
the competitive superiority for the company will be
achieved.
The company will be able to compete if it has a
good management inside it. The GCG
implementation quality is a way to actualize the good
management of a bank. The big impact of a company
performance is the company itself, how the
management able to maintain a good company for its
main reason. With a good knowledge management
and also good quality of management if it is not
supported with sufficient capital so the company will
not able to run. As capital is the most important thing
in the development and improvement of a company.
Capital also used to support the daily activities in
order to enhance the public trust. With a proper
management, the bank will keep increasing their
capital and pay attention to capital health indicator,
i.e.: CAR, so that the ROA will also increase.
4 CONCLUSION
According to the result and the discussion, it can be
concluded that:
1. The intellectual capital with iB-VAIC is the
partially significant difference to the ROA of
Islamic bank period 2011-2015.
The Effect of Human Resources, Management and Capital Performance toward Return on Asset - Case Study on Islamic Bank 2011-2015
129

2. The GCG implementation quality variable is not
partially significant difference to the ROA on
Islamic bank period 2011-2015.
3. The capital adequacy level is the partially
significant difference to the ROA on Islamic bank
period 2011-2015.
4. This intellectual capital with iB-VAIC, GCG
implementation quality, and capital adequacy
level are the simultaneously significant difference
to the ROA of Islamic bank period 2011-2015.
The suggestion from this research as follows:
1. For Islamic bank
This result can be used as a tool to reform
according to the maintaining the knowledge
resource, GCG implementation, and capital
adequacy level. This result indicates that IC that
calculated using iB-VAIC, GGC implementation
quality, capital adequacy level, and ROA are
connected. It is no doubt that knowledge resource
is a lifeblood for the bank to success. The IC
existence should be considered in order to create
value-added in a company because the result
obtained in this research emphasize that
intellectual capital is positively connected to the
ROA. The good knowledge resource
maintenance able to improve the employee ability
in implementing GCG so the bank can fill their
responsibility to supplying minimum capital.
However, if a bank implementing GCG well
should be followed by financing improvement in
a bank, then improving a profit and consequently
improving ROA of the bank.
2. For the next researcher
For the next researcher is able to expand the
sample research, increase the number of research
period to get the better result, and also use other
indicators in terms of Islamic bank performance
measurement.
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