The effect of intellectual and social capital on banks profitability

Abstract

Banks have increasingly become aware of the tremendous opportunities for their sustainability and societal benefits in today’s business environment. Social capital and intellectual capital might influence the performance of banks. This paper examines the effect of social and intellectual capital on the Jordanian bank’s net income. A quantitative approach is adopted, and the statistical program EViews is used to analyze data and test the hypotheses. The sample is withdrawn from the annual reports of 13 Jordanian commercial banks and data collected from 2010–2019. The study findings indicated a positive effect of social and intellectual capital on the bank’s net income. Furthermore, social and intellectual capital create added value and sustainability for the banking business. The results suggest that Jordanian banks should boost their social activities and intellectual capital to increase their net income and generate added value for the bank’s stakeholders in general. The study concluded that Jordanian banks have raised their net income by providing constant training and sustained development as part of their organizational culture, which will raise the efficiency of the working environment.