This study aims to analyze the effect of intellectual capital on risk reduction and intellectual capital on profitability improvement. The subject of this research was 114 Banking Companies obtained from financial statements issued in Indonesia Stock Exchange. The sampling method used in this research is purpose sampling method. The data obtained from annual reports in Indonesia and analyzing data using descriptive statistical tests, classic assumption tests consist of normality test, autocorrelation test, multicollinearity test, heterosyndasticity test and hypothesis test using Partial Test (T-Test) and determination coefficient (R-Square ) The result showed that: intellectual capital negatively effect to firm risk and intellectual capital positively effect to profitability..