A STUDY OF THE IMPACT OF ALMA TO PROFITABILITY DURING THE COVID-19 PANDEMIC

• Main Author: Rahmi, Yulia
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53578
• Institution: Institut Teknologi Bandung

Indonesia's banking sector faces a highly challenging short-term outlook due to the disruption caused by the Covid-19 pandemic. During the economic uncertainty, managing cash collection and liquidity management may be crucial to Bank performance. Therefore, to resilient and survive against COVID-19, Asset and Liability Management (ALMA) plays a key role in the banking industry to mitigate financial risk resulting from mismatch of assets and liabilities. The purpose of this research is to analyze the bank’s financial performance during Covid-19 pandemic and to examine the relationship between ALMA and profitability of Commercial Banks in Indonesia as the short-term impact of COVID-19 in 2020. The study focuses on commercial Bank based on Group of Business Activities (BUKU). The methodology of this research is quantitative and qualitative approach. Secondary and primary data are combined to support the analysis of this research. Secondary data collected by summarize the selected financial ratio from Indonesia Banking Statistic from OJK Report. Then, continue by FGD (focus group discussion) with experts in banking to reconfirm the result of study. The study found that the performance of commercial banks during Covid-19 pandemic is considered strong performance, on average ROA is 1.4%. However, banking profitability was yet maintained differently in each BUKU. Bank BUKU 1 is considered weak performance with negative ROA during Covid-19 pandemic. The result of the study indicates that statistically significant relationship for most asset and liability management primary variables toward Return on Asset (ROA), such as Capital Adequacy Ratio (CAR), Cost to Income Ratio (BOPO) and Loan to Deposit Ratio (LDR). Meanwhile, Net Interest Margin (NIM) does not have a significant relationship toward Return on Asset (ROA). This study will contribute as an empirical analysis to highlight the relationship of capital adequacy, operational efficiency and liquidity management with profitability of commercial Bank Indonesia. This study only examined the variable in the short-term period from January to September 2020. In the future, it is suggested to expand the literature until the end of Covid-19 pandemic in Indonesia to see how long commercial banks in Indonesia recover to normal business activities.