Singapore bank lending continues to slide in June

Fri, Jul 31, 2020

Vivien Shiao

https://www.businesstimes.com.sg/ban...-slide-in-june

BANK lending in Singapore continued its decline for the fourth consecutive month in June, dragged down by business loans and consumer loans amid the uncertainty from the ongoing Covid-19 pandemic.

Loans through the domestic banking unit - which captures lending in all currencies, but reflects mainly Singapore-dollar lending - dipped 0.7 per cent from the previous month to come in at S$680.36 billion, preliminary data from the Monetary Authority of Singapore (MAS) showed on Thursday.

On a year-on-year basis, total loans also fell 1 per cent - the first on-year decline since 2016.

In June, loans to businesses fell 1.1 per cent to S$425.85 billion from a month ago, weighed down by weaker loans to transport, storage and communication, general commerce and financial institutions.

The transport, storage and communication segment saw the biggest plunge by 8.6 per cent to S$26.88 billion, while loans to general commerce fell 1.5 per cent to S$64.62 billion. Loans to financial institutions fell 1.3 per cent to S$102.24 billion.

However, industries such as manufacturing, building and construction, and business services still saw an uptick in loans of 1.1 per cent, 1 per cent, and 1.2 per cent respectively, but it was not enough to offset the decline in loans in the other business segments.

Consumer loans also continued to fall, dipping 0.1 per cent to S$254.51 billion. Share financing led the decline with a drop of 7.3 per cent to S$1.6 billion, followed by car loans which fell 2 per cent to S$8.32 billion.

Housing and bridging loans, which make up the bulk of consumer loans, fell 0.1 per cent to S$199.52 billion.

Credit cards was one of the two consumer segments that saw an increase as Singapore entered Phase Two of its reopening around mid-June, with loans up 2.9 per cent to S$9.45 billion. This reversed its declining trend since January this year.

Unsecured personal loans - excluding credit cards - also ticked up 0.5 per cent to S$35.62 billion over the same period after four months of decline. This would reflect borrowings for education and renovation purposes, among others.