Singapore bank lending cools in July
Singapore
BANK lending in Singapore declined month-on-month for the first time since January this year, though it maintained a still strong year-on-year growth, preliminary data from the Monetary Authority of Singapore showed on Friday.
Loans through the domestic banking unit - which captures lending in all currencies, but reflects mainly Singapore-dollar lending - stood at S$667.53 billion in July. This was down 0.8 per cent from the record S$673.25 billion reached in June, but up 6.9 per cent from S$632.60 billion a year ago.
The month-on-month dip was due to the drop in business lending which shrank 1.4 per cent to S$402.46 billion from S$407.97 billion in June. The loss in monthly loan momentum came as loans to financial institutions fell 2.3 per cent to S$104.41 billion, with modest declines also in lending to the general commerce sector, manufacturers, and transport and storage sectors.
But loans to the building and construction sector, the biggest category in business lending, held up in July at S$127.49 billion, slightly higher than the S$127.19 billion in June and 5.4 per cent higher than S$121 billion a year ago. Year on year, business loans rose 6.9 per cent from S$377.71 billion in July 2017, just off June's 7.0 per cent increase, which was the fastest since November.
Consumer lending in July came in at S$265.07 billion, almost unchanged from S$265.28 billion in June. But the year-on-year growth of 4.0 per cent from S$254.88 billion in July 2017 was lower than the increase of 4.3 per cent in June and 5.0 per cent in May.
Last-minute buying to beat the latest round of property cooling measures that took effect on July 6 supported mortgage loans - that make up the bulk of consumer lending. Housing and bridging loans clocked in at S$203.38 billion, up 0.2 per cent from June's S$203.04 billion, and a 4.0 per cent increase from S$195.49 billion a year ago.
But the reprieve may be temporary. Singapore banks are bracing for a slowdown in home loans given the latest property curbs.
Global trade frictions may also have a bigger impact on business sentiment and spending going forward.
