Total bank lending rose again in July - the third consecutive month of increase - but at a slower pace of growth.
Banks lent a total of $610.4 million in July, up 0.6 per cent on the $606.8 million lent in June, with loans to both businesses and consumers rising.
The rise was smaller than the 1.6 per cent growth from May to June, when there was a big jump in construction loans, said the Monetary Authority of Singapore yesterday.
Loans to businesses increased 0.6 per cent in July, with growth in all sectors except one - transport, storage and communication.
The strongest growth in business lending came in the agriculture, mining and quarrying sector, which took up 2.4 per cent more loans in July than in June.
Loans to businesses increased 0.6 per cent in July, with growth in all sectors except one - transport, storage and communication. The strongest growth in business lending came in the agriculture, mining and quarrying sector.
Consumer loans rose 0.6 per cent to $240.2 million in July from June as a growth in mortgages, credit cards and others outweighed a drop in car loans and share financing.
Property loans climbed 0.7 per cent to $181.6 million in July, faster than the 0.5 per cent rise seen in the previous month.
Car loans, which have been declining for over a year, dropped 1 per cent in July to $8 million, after falling 0.3 per cent in June.
July bank lending grew 2.2 per cent from $597.4 billion in the same month a year ago.
OCBC economist Selena Ling noted that this was the second month of year-on-year growth for bank lending, after loans rose 1.5 per cent in June. This improvement was driven both by business loans, up 1.1 per cent in July from a year ago, and consumer loans, up 3.9 per cent.
"This in in line with our view that second-quarter (economic) growth may have marked the trough for this year, although the third quarter is not exactly a walk in the park, given that July industrial production and non-oil domestic exports data were softer than expected and signalled an increasing risk of a technical recession," Ms Ling said.
Singapore's industrial production contracted 6.1 per cent in July from a year ago, while non-oil domestic exports shrank 0.8 per cent.
Ms Ling added that weakness was seen for a second straight month in business services, to which loans dropped 6.7 per cent in July year on year after slipping 4.6 per cent in June.
This suggests that "services growth momentum may taper off in the coming months", she said.