ASSET SECURITIZATION AS A LONG-TERM FUNDING AND FEE BASED INCOME ALTERNATIVES: CASE STUDY OF BTN CHANTIKA DHIAH PRAMESWARI (a), ROFIKOH ROKHIM (b)
a & b : Department of Management, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia
Abstract
BTN is the first Indonesian national bank to conduct asset securitization transactions in 2009 and continues to do this nowadays. Asset securitization is an innovative strategy for obtaining long-term sources of funds for the Bank. In addition, Bank will be able to overcome liquidity risk and maturity mismatch problems. Bank will earn income as a servicer which can be used as an alternative fee-based income. We analyze the implementation of asset securitization and its impact for BTN. We conducted interviews with the unit that carries out asset securitization at BTN and conducted data processing to see how servicing fee affect fee-based income and profitability for BTN. The result shows that asset securitization has positive impacts for BTN such as improving the maturity profile to overcome maturity mismatches, increasing CAR, and obtaining servicing fees. Meanwhile, the negative impact for BTN is the reduction number of assets in the balance sheet, which can temporary increase NPL ratio until the realization of new loans with good payment quality.
