Singapore banks report strong uptake for green loans
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Green home loans are on the rise as consumers adopt sustainability measures in their lifestyles.
ST PHOTO: LIM YAOHUI
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SINGAPORE - Banks in Singapore said there is growing awareness and interest among consumers to take up green financing solutions.
These loans promise preferential interest rates, rebates and shopping vouchers for eligible consumers who fulfil some pre-set criteria.
In this way, green loans seek to encourage consumers to adopt more environmentally friendly and sustainable lifestyles.
To qualify for the green home or renovation loans, homes must have energy-efficient features such as LED lighting, ceiling fans instead of air-conditioners for ventilation, and smart devices to turn off home appliances remotely when not in use.
As for green car loans, car buyers either have to buy an electric vehicle or a hybrid vehicle.
Some banks with green loan offers in Singapore include OCBC Bank, UOB, DBS Bank and HSBC.
1. OCBC green loans
Among the banks with green loan offerings, OCBC has the most comprehensive portfolio of home, car and renovation loans.
The bank said there has been strong take-up of its Eco-Care loans since it began offering them in March 2021.
OCBC said interest was particularly strong in 2022, which saw the value of Eco-Care loans extended quadrupling from 2021.
More than $3.5 billion of Eco-Care loans have been extended since 2021, and these loans now make up one in five of the home, renovation and car loans extended by the bank.
Mr Sunny Quek, head of global consumer financial services at OCBC, said the top two concerns hindering green adoption among Singaporeans are cost and convenience.
Addressing these concerns has enabled a better than expected take-up rate for Eco-Care loans, he said, adding that this upward trajectory should continue.
“Despite inflationary pressures and expectations that the housing market may slow down this year, we are still targeting close to 10 per cent year-on-year growth in OCBC Eco-Care loans,” Mr Quek added.
Eco-Care home loans quadrupled in value in 2022 compared with the previous year. They also accounted for close to a quarter of the number of new home loans that the bank issued in 2022.
Eco-Care renovation loans accounted for more than 60 per cent of the value of new renovation loans extended in 2021 and close to 75 per cent in 2022, indicating robust growth.
OCBC said nearly two-thirds of its green renovation loans were taken up by customers who live in Housing Board flats.
And, as Singapore continues to encourage the adoption of electric vehicles, OCBC said the value of its Eco-Care car loans extended in 2022 surged by more than 400 per cent from 2021.
2. UOB green loans
OCBC’s peer UOB offers green loans for homes and cars.
Ms Jacquelyn Tan, head of group personal financial services at UOB, said there was a tenfold surge in the take-up of its Go Green Home Loans in 2022.
She added that Go Green Car Loans make up 15 per cent of total car loans extended to customers in 2022. “One in five electric vehicles in Singapore is financed by UOB,” she said.
Ms Tan said UOB gives renewable energy certificates (RECs) to customers who take up its Go Green Car Loans.
RECs certify that holders own units of electricity generated from renewable energy sources.
Each certificate is equivalent to one megawatt-hour of “green” electricity and can be used to offset electricity consumption from fossil fuels.
“As at end-2022, we have offset the equivalent of over 365,000kg of carbon dioxide emissions via these RECs,” Ms Tan added.
3. DBS green loans
DBS has been offering Green Solutions loans for renovations and cars since 2021.
Ninety per cent of DBS’ renovation loan customers are now on a green loan, said Mr Brandon Lam, head of deposits and financing solutions at DBS Consumer Banking Group Singapore.
He added that there was a more than 60 per cent increase in the amount of renovation and car green loans disbursed between June 2021 and December 2022.
4. HSBC green loans
HSBC launched its Green Mortgage in late 2021, which continued to see strong demand in 2022, with “new sales almost doubling against its annual target”, according to a spokesman.
“Demand for green mortgages will continue to grow as green residential properties become more mainstream.”
