Bank lending up 6.8% in October

More business borrowing amid the better economic outlook sent bank lending up in October - the 13th straight month of increase.

Total lending hit $649.56 billion, a 6.8 per cent increase on October last year, according to preliminary data from the Monetary Authority of Singapore yesterday.

Bank loans have been rising year on year since last October, with growth hitting 7.6 per cent in June, the fastest in more than two years.

Business lending came in at $390.7 billion in October, up 9 per cent on October last year, due in part to a 25.5 per cent surge in loans to financial institutions.

Loans to business services firms rose 17.7 per cent year on year while those to general commerce companies increased 13.6 per cent.

"This strong showing is a likely testament to the improving business sentiments amid a benign macroeconomic backdrop," said OCBC economist Selena Ling.

Lending to consumers also remained resilient, expanding 3.8 per cent over October last year to reach $258.86 billion.

This was slightly faster than September's 3.6 per cent pace, even though housing loan growth eased marginally from 4.2 per cent in September to 4.1 per cent in October. This was offset by a pick up in car loans and share financing.

"Although the October bank loans growth was better than expected and brought the first 10 months' performance to a robust 6 per cent year on year, we still think there could be a modest pullback for the remaining two months of the year," said Ms Ling.

A version of this article appeared in the print edition of The Straits Times on December 01, 2017, with the headline 'Bank lending up 6.8% in October'. Print Edition | Subscribe