Singapore bank lending in June grows at fastest pace in 7 months

Pace of growth in June lending is stronger than the 0.1 per cent month-on-month rise in May, reflecting stronger growth in business loans.
Pace of growth in June lending is stronger than the 0.1 per cent month-on-month rise in May, reflecting stronger growth in business loans.PHOTO: BLOOMBERG

SINGAPORE - Bank lending in Singapore rose at its fastest pace from a year ago since November, driven by a sharp increase in business loans, preliminary data from the Monetary Authority of Singapore showed on Tuesday (July 31).

Loans through the domestic banking unit - which captures lending in all currencies, but reflects mainly Singapore-dollar lending - stood at $673 billion in June, up 5.9 per cent from a year ago.

"This beat our expectation for a moderation in June," said Selena Ling, head of treasury research and strategy at OCBC, noting the strong loan momentum to financial institutions, business services, building and construction, as well as general commerce.

Indeed, even the transport and storage sectors - which would include oil-and-gas companies - saw loans growth recover to grow 0.8 per cent year-on-year in June, reversing from a 0.8 per cent year-on-year contraction in May, she added.

Overall, business lending clocked a 7 per cent rise in June to $408 billion from a year ago - its fastest gain since November.

Consumer lending in June was up 4.3 per cent from a year ago to $265 billion, with the growth easing from the 5 per cent year-on-year increase posted in May.

OCBC's Ms Ling said: "Given the latest property cooling measures in early July, mortgage loans could potentially see a bump in July before easing further in the coming months."