The Effect Of Size On Fee Income In The Indonesian Banks

Abstract

In response to growing competitive pressures in the banking industry, financial institutions are compelled to cultivate diversified revenue models that reduce reliance on interest income. A primary strategy involves optimizing fee-based revenue. This research empirically examines the influence of bank size on fee income in Indonesian banking. Utilizing a panel dataset from 43 general banks over the 2013–2024 period and applying a Fixed Effect Model regression, the analysis yields a key finding: bank size exerts a significant and negative influence. The control variables (CAR, LDR, NPL_NET) were found to be statistically insignificant. With the model confirming an absence of multicollinearity and heteroskedasticity, these results underscore the critical need for strategic asset management to prevent the suppression of fee income, thereby informing more sustainable business strategies for bank managers.