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The aim of this paper is to examine whether the Information technology (IT) capability of a bank can create economic value and competitive advantage. In contrast to previous research, which generally concentrated on the effects of IT investment on competitive advantage, this paper examines IT capability directly. Based on a sample of 15 banking firms, this paper investigates the effects of IT capability and human capital support on three firm-performance measures. The results demonstrate that human capital support contributes directly to performance of banking firms.