Bank lending in February grew at its fastest pace in more than two years, driven partly by a pick-up in business loans on the back of a more optimistic economic outlook.
Total bank loans rose to $627.4 billion, up 5.2 per cent compared with $596.2 billion in February last year, according to preliminary data from the Monetary Authority of Singapore (MAS) yesterday.
This was nearly double January's 2.8 per cent growth rate and marked the largest year-on-year increase since December 2014. February's strong growth could have been due in part to a low base last year as a result of the timing of the Chinese New Year festive season, OCBC economist Selena Ling noted.
Lending to businesses expanded for the third straight month to $376.6 billion, a 6.4 per cent rise from a year earlier and the fastest rate since November 2014.
While loans to the manufacturing sector slid 2.6 per cent, this was offset by strong increases elsewhere.
Loans to business services firms surged 25.2 per cent and lending to financial institutions went up 20.9 per cent year-on-year.
Increase in total bank loans compared with February last year.
Ms Ling noted that lending to the general commerce sector rose for the first time since December 2014, growing 6.7 per cent.
If this is sustained, it " could herald green shoots for regional economic and trade activities", she added.
Meanwhile, consumer loans rose 3.6 per cent year-on-year in February, supported by an increase in mortgages and credit card interest payments.
Housing and bridging loans rose 4 per cent year-on-year to reach $192.8 billion, while credit card loans grew to $10.5 billion from $9.97 billion a year ago.
Ms Ling said it is not surprising that housing and bridging loans have remained resilient - property developers sold a total of 977 private residential units in February, according to sales data collated by the Urban Redevelopment Authority.
This was more than 150 per cent higher than the 382 units sold in January.
The recalibration of some property cooling measures in March could lend further momentum to the loan growth in the coming months, she added.