A Longitudinal Study of Intellectual Capital Disclosures in Islami Bank Bangladesh

Islamic banking and financing industry has emerged as an alternative form of banking and finance in recent years in the context of erosion of trust in the conventional banking system caught in the last financial crisis. It can be argued that unique knowledge base in alternative banking is one of the competitive advantage of this type of banking. Therefore, these banks are supposed to have significant intellectual capital. But how and why intellectual capital related information are disclosed in their corporate statements are relatively less known. That is why this study aims to undertake a longitudinal investigation of Intellectual Capital Disclosures (ICD) in Islami Bank Bangladesh Limited (IBBL) to understand the patterns and trends of ICD over time. For this purpose we have followed a longitudinal single case study design. The data has been analysed using content analysis procedures. We have analysed the ICD made within the annual reports of IBBL from its inception (1983) to the current available year (2010). The study reveals that volume of ICD has been increasing over the period particularly since 2006 the rate is fabulous because of growing disclosure of external capital. The study also reveals that descriptive-nature ICD is much higher than monetary and non-monetary disclosure over the period. Year by year ranking on disclosure score by category shows external capital disclosure score is predominantly higher than human capital and internal capital disclosure score till 1995 but from year 2001 human capital disclosure score has been consistently higher than other two categories. Moreover, study finds that among all individual items, disclosure regarding corporate reputation is ranked number one followed by training programs. The paper makes a number of contributions to the ICD literature. Firstly, it provides a longitudinal study of a single organisation as opposed to cross section data used by previous studies. Secondly, it illuminates the patterns of ICD in an Islamic bank which is less researched to date.