Examining the Implementation of Green Banking and Intellectual Capital on Bank’s Profitability in Indonesia

The aim of this study was to examine the implementation of green banking operations and intellectual capital (IC) on bank’s profitability in Indonesia. Quantitative approach and panel data regression analysis were employed in this study. The bank’s profitability was measured by return on assets (ROA). Green banking operations were reflected through the combinations of bank’s e-channel transactions and the measurement of intellectual capital components were from Modified Value-Added Intellectual Coefficient (MVAICTM). A purposive sampling method was applied concerning the disclosure of e- channel’s transactions. The samples were taken from annual reports and/or sustainability reports of 14 banking sub-sector companies that listed on the Indonesia Stock Exchange (IDX) for the year 2012-2021 with a total observation of 107 samples. The results state that the total transactions via e-channel had a significant influence over ROA. However, the relationship is negative. MVAICTMcomponents of human capital efficiency (HCE) and capital employed efficiency (CEE) had a positive and significant impact on ROA. The other two components, structural capital efficiency (SCE) and relational capital efficiency (RCE) did not have a substantial influence over ROA