Bank loans up after two months

Members of the public using the UOB ATM machines which are located next to DBS bank at Toa Payoh Central.
Members of the public using the UOB ATM machines which are located next to DBS bank at Toa Payoh Central. PHOTO:ST FILE

Bank loans inched back up in November after falling for two straight months, boosted by lending to construction firms and share financing.

Year-end shopping also looked to be a big driver of lending activity - credit card payments rose 2 per cent from October to $10.2 billion in November, greatly outpacing the 0.3 per cent gain in total consumer loans. Despite the year-end market lull, there was a sharp 12 per cent rise in share financing to $932.2 million, while housing and bridging loans increased 0.4 per cent from October to $184.3 billion.

These helped boost consumer loans as a whole to $242.3 billion.

Car loans, however, continued to fall, this time slipping 0.3 per cent from October to $7.85 billion.

Loans to businesses also recovered after declines in September and October, edging up 0.4 per cent to $360.2 billion.

Lending to almost all industries grew, except for general commerce, for which loans fell 0.9 per cent to $69.8 billion, and business services, which took on $7.2 billion in loans, 1.4 per cent lower than in October.

These were offset by a particularly healthy rise in loans to financial services firms, with loans to the sector climbing 2.1 per cent to $$69.7 billion.

The building and construction industry also chalked up among the highest gains in borrowing. Firms in the sector borrowed $120 billion, up 0.5 per cent from October.

Loans to manufacturing firms also rose 0.5 per cent from October, to $30 billion.

Despite the turnaround in loan numbers, a year-on-year comparison shows the mark that the uncertain economic outlook has made in bank lending, especially to the business community.

Compared with the same period a year ago, total loans in November fell 0.7 per cent, dragged down by a 3 per cent fall in loans to businesses.

Consumer loans, however, are up 3 per cent from the same period a year earlier.

A version of this article appeared in the print edition of The Straits Times on January 01, 2016, with the headline 'Bank loans up after two months'. Print Edition | Subscribe