Overall bank lending up in June
Business loans rose while housing loans were down for the sixth consecutive month
Overall bank lending rose in June from a month ago with more business loans, but housing loans were down for a sixth straight month as property cooling measures continued to linger in the market.
Banks lent $687 billion in June, an increase of 0.8 per cent from May, preliminary data from the Monetary Authority of Singapore (MAS) showed yesterday. It was the fifth consecutive month that bank lending had expanded.
The year-on-year increase for overall bank lending was 2.1 per cent, a fall from the 5.9 per cent recorded from 2017 to last year.
CIMB Private Banking economist Song Seng Wun said the slower loan growth came amid slower economic growth.
Flash estimates by the Trade and Industry Ministry earlier last month pegged Singapore's economic growth at 0.1 per cent in Q2 of this year.
The figure was well below analysts' expectations of 1.1 per cent and was the lowest growth since the economy contracted by 1.2 per cent in the second quarter of 2009 - a fallout of the global financial crisis.
While business loans recorded a boost in June, the opposite was true for consumer loans.
Associate Professor Lawrence Loh from the National University of Singapore said: "The two somewhat opposite trends of business loans and consumer loans tell us that economic activity is more concentrated on the supply or production side rather than the demand or consumption side."
Total business loans in June stood at $423.5 billion, 1.3 per cent more than in May, and 3.8 per cent more than in June last year.
Prof Loh, who is also director of the Centre for Governance, Institutions and Organisations, said: "The data suggests that businesses are sustaining their ongoing growth momentum, which is an optimistic sign for Singapore."
He added that "businesses expect to profitably use the funds for goods and services to serve markets, be these global or local".
Mr Song called the latest loan figures "a mixed bag" as some bright spots such as the biomedical cluster and general manufacturing industries remain, despite the drag caused by electronics manufacturing.
Total consumer loans in June dipped 0.1 per cent from May, to $263.6 billion - a fall of 0.64 per cent from June last year.
Prof Loh said: "The dampening of consumer loans may be due to regulatory actions like the property cooling measures, although the impetus for car financing is still there."
Housing and bridging loans, which account for three-quarters of consumer lending, edged down 0.2 per cent from May, to $202.2 billion - a drop of 0.41 per cent from June last year.
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