Singapore bank loans down for 10th straight month, but recovery in sight | Asian Banking & Finance - The Latest News, Headlines, Insight, Commentary & Analysis
,Singapore
2 views

Singapore bank loans down for 10th straight month, but recovery in sight

The 0.2% drop in March was the smallest decline recorded since the indicator turned negative in June last year.

Singapore’s bank loans fell for the 10th consecutive month with a 0.2% drop in March—although this is the smallest decline in loan growth since the economic bellwether statistic turned negative in June 2020, notes OCBC Treasury Research.

The improvement was thanks to the consumer loans segment expanding 2.1% YoY in March compared to the same month a year earlier, mostly pushed by the housing & bridging loan growing for the fourth straight months, at 1.8% YoY.

However, business loans continued to falter for the 7th straight month, declining 1.5% YoY in March. Whilst loans related to building & construction and business services grew by 5.5% YoY and 3.7% YoY, respectively, they are unable to compensate for the weakness in general commerce (-4.1%), financial institutions (-6.4%), and manufacturing (-4.2%).

Despite continued weakness from the business segment, bank loans continue to improve month-on-month. Loans expanded for the 5th consecutive month with a 0.7% growth in March compared to February, on the back of healthy business and consumer loans.

“This latest bank loans data reinforces the green shoots story in the Singapore economic recovery and it is likely that the overall bank loans data may revert to modest positive on-year growth in the coming months,” said Selena Ling, head, Treasury Research & Strategy, OCBC Treasury Research.

Overall, total bank loans fell 0.7% YoY in Q1 2021, although this is still slightly better than the -0.8% YoY that OCBC Treasury Research forecasted earlier. It is also 2.1% higher than Q1 2019 levels.

Ling forecasts that bank loans with grow 0.3% YoY for the full year, with loans in the second half of the year pulling up the numbers. “Note that domestic business sentiments are gradually improving further going into H2 2021 amid the vaccination progress and talk of more travel bubbles opening up,” she added.

Get Asian Banking & Finance - The Latest News, Headlines, Insight, Commentary & Analysis in your inbox
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Banks have to remain consistent and continuous in testing best practices.
Shares were priced at the top end, at KRW39,000 ($34).
In January, 1.2 million transactions were carried out via the SGQR.
Its launch will require legal changes to the nation’s foreign exchange and IT rules.
But less than half of consumers are impressed with the digital financial services currently offered.
Treasury teams can mobilize liquidity and fund intraday payments in real-time.
Customers have the option to pay their tax balances in full or partially.
About 750 new accounts have been opened in four APAC markets through the new portal.
UnionDigital will be a wholly-owned subsidiary of the Philippine lender.
SmartStream’s Peter Hainz and Amazon Web Services’ Anna Green shared their insights on the advantages of on-demand and highly scalable cloud environments for banks and other financial institutions, as well as the factors hindering its adoption in the region.
This August, the Asian Banking & Finance and SAP will provide insights on the evolving landscape for ESG in financial services.
Thirteen lenders noted that demand was moderately weaker than the preceding 3-month period.
Investors will likely seek signs that private lenders will be able to step up lending once COVID subsides.
It opens up new revenue models and lowers the cost-to-serve.