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Bank lending ends 2016 with 2.9% gain in December

The bounce came from business lending, driven by growth in lending to financial bodies and construction

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A last burst in bank lending in the final month of 2016 led to a 2.9 per cent growth in December from a year ago, higher than the 1.1 per cent registered in November, preliminary data from the Monetary Authority of Singapore (MAS) on Tuesday showed.

Singapore

A LAST burst in bank lending in the final month of 2016 led to a 2.9 per cent growth in December from a year ago, higher than the 1.1 per cent registered in November, preliminary data from the Monetary Authority of Singapore (MAS) on Tuesday showed.

This level of growth was last seen in February 2015, but it remains unclear whether this was just a blip.

The gasp in gains came from business lending; lending to financial institutions and the construction sector more than made up for persistent weakness in lending to trade-related industries.

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This growth in lending comes on the heels of consecutive contractions in year-on-year growth between October 2015 and September 2016, data compiled by The Business Times showed.

Loans through the domestic banking unit - which captures lending in all currencies but mainly reflects Singapore-dollar lending - stood at S$617 billion in December, up from S$611 billion in November.

The small bounce at the end of the year was driven by the 16.9 per cent year-on-year jump in lending to financial firms to S$80.3 billion.

This was added heft compared to the 14 per cent growth registered in November, and continues on from double-digit growth in lending to the industry since September 2016.

Lending to the building and construction sector - the largest single contributor to business lending - also got a small lift, rising 1.7 per cent in December from a year ago to S$121 billion. This reverses the contraction noted in November.

These more than countered the clear weakness to lending in the general commerce space, which again fell by 3 per cent to S$64 billion.

What helped the numbers along was that the contraction was weaker than usual, with November's reduction at 9 per cent. Loans to general commerce firms have been contracting in consecutive months since January 2015.

All in, business lending rose 2.8 per cent to S$367 billion - again a pace of growth not posted since January 2015.

Consumer loans gained 3 per cent in December from a year ago to S$250 billion - similar to gains in November - boosted by stronger mortgage lending that makes up three quarters of consumer loans. Housing loans were up 4 per cent from a year ago to S$192 billion, a shade stronger than the 3.7 per cent growth registered in November.

Credit card loans were up 5.2 per cent to S$10.8 billion in December from a year ago, a pace not seen since February 2015.

From a month ago, bank lending rose 1.1 per cent in December 2016 from the month before, compared to the 0.4 per cent growth in November.

Business loans rose 1.7 per cent in December from November, while consumer loans grew 0.3 per cent.

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