The study examines the role of intellectual capital efficiency and its components on financial performance of commercial banks. To achieve study objectives Pulic 1998 value added intellectual coefficient is adopted to measure the effect of intellectual capital efficiency. The study adopted explanatory research design with arrangement of secondary data analysis via document analysis, quantitative approach, and deductive method of inquiry. Panel data used with a sample of 13 banks over the study period 2010/11-2017/18. Descriptive and regression analysis were performed to analyze the data using STATA 12. Econometric model estimation procedures and multiple regression assumptions were tested accordingly. The fixed effect regression result revealed that human capital efficiency has positive significant associated with financial performance. Whereas, capital employed efficiency and structural capital efficiency was positive and negative insignificant impact on financial performance. While, the random effect regression result also proposed value added intellectual capital and bank size have positively associated with financial performance. Whereas, government ownership has negatively associate with financial performance. However, bank specific factors (Tangibility of asset and Leverage) and Macroeconomic factors (Gross domestic product and Inflation) have positive and negative respectively, but statically insignificant with financial performance of commercial banks in Ethiopia.