January bank lending slips on mortgage weakness

Fri, Mar 01, 2019


BANK lending in Singapore slipped in January from a month ago, reflecting weaker mortgage activity as the chill from property cooling measures continue to bite.

Loans through the domestic banking unit - which captures lending in all currencies, but reflects mainly Singapore-dollar lending - stood at S$671.21 billion, down slightly by S$524 million from S$671.74 billion.

That translates to a 0.1 per cent contraction in January from December, preliminary data from the Monetary Authority of Singapore showed on Thursday, and continues on from flattish month-on-month growth since November.

Consumer lending eased by 0.3 per cent to S$265.5 billion at the end of January compared with that in December. Housing loans, which make up three-quarters of consumer lending, slipped to S$204.25 billion from S$204.30 billion in December.

Singapore banks have flagged that property lending is expected to ease further in 2019. Singapore's largest mortgage bank DBS expects about S$1.5 billion to S$2 billion in mortgage growth this year. DBS's mortgage book grew S$500 million for the fourth quarter ended Dec 31, and just under S$2 billion for the whole year.

UOB expects a further slowdown in mortgage volume by 35-40 per cent in 2019. UOB has a market share in the mortgage business in Singapore of 24-25 per cent, versus DBS's pole position of 31 per cent.

OCBC has guided that mortgages may not "fall off the edge". Given the amount of en bloc deals in recent times, some of them are due to kick in this year, leading some home owners to re-enter the market as buyers.

Business lending was up 0.1 per cent to S$405.71 billion in January from December. From a year ago, total lending in January rose 3.2 per cent, a shade stronger than the 3 per cent year-on-year gain in December.