Total bank lending hit a five-month high in June, due in large part to a rise in loans to the building and construction sector.
Loans to both consumers and businesses came in at $606.8 billion, a 1.6 per cent rise from May and the highest since January, according to preliminary central bank data out yesterday.
This comes after bank lending rose 0.5 per cent in May from April, finally turning the corner after four straight months of decline.
Lending to all business segments reached $368.1 billion in June, up 2.3 per cent from May's $359.7 billion. Loans to the building and construction sector - which make up the single-largest part, or about a quarter, of all business loans - surged 11.7 per cent over May, making it the fastest-growing segment.
However, loans to manufacturers, general commerce firms, business services firms and financial institutions contracted.
Consumer loans came in at $238.8 billion, up from May's $237.3 billion. Car loans continued their downward spiral, falling a further 0.3 per cent month-on-month to $8.1 billion.
Housing and bridging loans, the biggest component of consumer loans, added up to $180.3 billion in June. This was a 0.5 per cent increase from May.
OCBC economist Selena Ling said continued drawdowns in mortgage loans will help keep consumer loans on an even keel, even with the ongoing correction in the domestic property market and the unemployment rate edging up to 2 per cent in the second quarter.
Overall, June bank lending grew 1.5 per cent from $597.8 billion a year earlier.
Bank loans averaged 2 per cent year-on-year growth for the first half of the year, Ms Ling noted, though it remains to be seen if this momentum can be sustained in the coming months.
She tips bank-loans growth of 1.5 per cent this year.