1 ONUCHE, SARAH ELEOJO VICTOR AND 2 JONES, EBIERI Ph.D., FCIB
Corresponding Author: Jones, Ebieri
Department of Accounting, College of Management Sciences, Michael Okpara University of
Agriculture Umudike, P.M.B. 7267 Umuahia, Abia State. Nigeria.
1 Email: sarah.edibo@gmail.com& 2 ebierijones@yahoo.co.uk Phone no: 1 07038061139
& 2 08033386822

Abstract
The study investigated effect of Intellectual Capital Costs on Financial Performance of listed
Commercial Banks in Nigeria during the period 2007 to 2016. The choice of the period was
predicated on establishing the relationship of the variables during the Sub-Sector’s post consolidation
era in Nigeria. It employed ex post facto research design and extracted data from cross section of
three banks from ten (10) years annual report. The data were purposively selected based on
availability. The study adapted the Value Added Intellectual Capital Coefficient Model as proxy for
Intellectual Capital Costs while Return on Equity was adopted as proxy for Financial Performance.
Engaging the Ordinary Least Squares based balanced Panel data regression technique in a
longitudinal data framework of thirty (30) observations, the results established how Intellectual
Capital Costs affect Return on Equity of the selected Banks in line with a priori expectation. It
provided evidence that 52.8% of the total variation on Return on Equity of the listed Banks on Nigeria
Stock Exchange is attributable to variations in Intellectual Capital Costs proxies included in the
model. The study proved that individually, Human Capital Efficiency has positive significant
relationship with Return on Equity while Structural Capital Efficiency and Capital Employed
Efficiency individually, has positive but insignificant relationship with Return on Equity. The paper
therefore substantiated that Intellectual Capital Costs significantly affect Return on Equity and
concludes that Intellectual Capital Costs has significant effect on Financial Performance of listed
Commercial Banks in Nigeria. It recommends that regulatory authorities should set benchmark of
training standards for staff of banks so as to enhance skills not just in banking operations and earnings
generation but also in effective and efficient relationship management.
Key Words: Intellectual Capital Costs, Return on Equity, Listed Commercial Banks, Nigeria.

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