Core Viewpoint - The article argues that while securitization is a financing tool, it is not suitable for banks to dispose of non-performing loans due to various inefficiencies and potential losses associated with the process [1][2][21]. Summary by Sections Principle Explanation - Securitization primarily generates returns for investors from the recovery of non-performing loans, which are still collected by the banks themselves, leading to a situation where banks effectively pay out a portion of their own recoveries to investors [1][2]. - The cash flow from securitized non-performing loans tends to be stable initially but decreases over time, which complicates the timing of cash recovery during the transition period before formal issuance [2][5]. - During the transition period, banks may only receive about 50% of the expected cash flow from the securitized assets, as the initial recoveries belong to the investors [5][6]. - The article highlights that banks often incur significant write-off resources when securitizing loans, which could be avoided through direct recovery methods [7][8]. Empirical Analysis - From 2021 to 2024, Postal Savings Bank issued 22 securitization products, with the total amount of non-performing loans disposed of and the corresponding cash received from securitization detailed in a table [11][12]. - The average cash recovery during the transition period reached approximately 47.8% of the securitization proceeds, demonstrating the inefficiency of the securitization process [14]. - The analysis shows that the cash recovery period for these products averaged around 367 days, indicating that banks could have achieved similar results through direct recovery without securitization [14][15]. Related Thoughts - The article discusses the motivations behind banks engaging in securitization, suggesting that intermediaries benefit financially from the process, which may lead to a lack of thorough cost-benefit analysis by the banks themselves [20][21]. - It emphasizes that while securitization is a common practice, it may not be the most effective method for managing non-performing loans, as banks could achieve better outcomes through direct recovery and write-off strategies [21][22].