Singapore bank lending cools in July with first month-on-month decline since January

The month-on-month dip was due to the drop in business lending which shrank 1.4 per cent to $402.46 billion from $407.97 billion in June 2018.
The month-on-month dip was due to the drop in business lending which shrank 1.4 per cent to $402.46 billion from $407.97 billion in June 2018.PHOTO: ST FILE

SINGAPORE - Bank lending in Singapore declined month-on-month for the first time since January this year, though it maintained a still strong year-on-year growth, preliminary data from the Monetary Authority of Singapore showed on Friday (Aug 31).

Loans through the domestic banking unit stood at $667.53 billion in July, down 0.8 per cent from the record $673.25 billion reached in June, but up 6.9 per cent from $632.60 billion a year ago.

The month-on-month dip was due to the drop in business lending which shrank 1.4 per cent to $402.46 billion from $407.97 billion in June.

The loss in monthly loan momentum came as loans to financial institutions, the general commerce sector, manufacturers, and transport and storage sectors saw modest declines.

Year-on-year, business loans rose 6.9 per cent from $377.71 billion in July 2017, just off June's 7.0 per cent increase, which was the fastest since November.

Consumer lending in July came in at $265.07 billion, almost unchanged from $265.28 billion in June, but up 4.0 per cent from $254.88 billion a year ago.

Last-minute buying to beat the the latest round of property cooling measures that took effect on July 6 supported housing and bridging loans that month, as they clocked in at $203.38 billion, up 0.2 per cent from June's $203.04 billion, and a 4.0 per cent increase from $195.49 billion a year ago.

The reprieve may be temporary though. Singapore banks are bracing for a slowdown in home loans given the latest property curbs. Global trade frictions may also have a bigger impact on business sentiment and spending going forward.