Bank lending drops for 4th straight month in June

On a year-on-year basis, total lending last month was down about 1 per cent from $687.08 billion in June 2019.
On a year-on-year basis, total lending last month was down about 1 per cent from $687.08 billion in June 2019.PHOTO: ST FILE

Bank lending in Singapore shrank 0.7 per cent last month from a month ago as loans to businesses continued to decline, though there were signs of a pick-up in consumer lending with the lifting of circuit breaker measures.

Loans through the domestic banking unit - which captures lending in all currencies but reflects mainly Singapore-dollar lending - stood at $680.36 billion last month, compared with $685.26 billion in May, according to preliminary data from the Monetary Authority of Singapore yesterday.

This marks the fourth consecutive month that bank lending has dropped amid the Covid-19 crisis.

On a year-on-year basis, total lending last month was down about 1 per cent from $687.08 billion in June last year.

Total business loans fell 1.1 per cent to $425.85 billion last month from a month ago.

They were dragged down by loans to financial institutions, which continued to decline, falling 1.3 per cent to $102.24 billion.

Also dropping were loans to firms in general commerce and in transport, storage and communication.

Conversely, loans to building and construction firms rose again month on month, climbing 1 per cent to $148.06 billion, while lending to manufacturers also increased by 1 per cent, to $29.1 billion.

However, the slump in consumer loans, which began in February, eased last month, with lending down just 0.05 per cent, to $254.51 billion, from a month ago.

Credit card lending - which plunged during the circuit breaker period from the closure of retail and food and beverage outlets, and from travel restrictions - rose to $9.45 billion last month.

This is 2.9 per cent higher than May, but still 17 per cent lower than in June last year.

 

Car loans, however, continued to drop and were down 2 per cent month on month to $8.32 billion.

This is 7.5 per cent lower than a year ago.

Housing loans, which make up three-quarters of consumer loans, continued to weaken amid economic gloom, job uncertainty, and restrictions on home viewing. They dipped another 0.1 per cent to $199.52 billion last month.

Ann Williams

A version of this article appeared in the print edition of The Straits Times on July 31, 2020, with the headline 'Bank lending drops for 4th straight month in June'. Print Edition | Subscribe