Total bank lending in Singapore fell a little in February, with business loans continuing their slide for a third straight month.
The overall sum lent to both consumers and businesses for the month was $603.5 billion, according to data released by the Monetary Authority of Singapore (MAS) yesterday. This is a 0.65 per cent drop from the $607.47 billion lent in January.
Bank loans across all business segments totalled $366.4 billion, down 1.04 per cent from the $370.3 billion in the month before.
Lending slid the most in business sectors such as general commerce and financial institutions, which shrank about 2.69 per cent and 2.33 per cent respectively.
Their declines dragged down overall business loans even though loans to manufacturers saw the biggest increase at 1.5 per cent.
Consumer loans, on the whole, came in at $237.1 billion, little changed from the $237.2 billion in January. Housing and bridging loans, the largest component of consumer loans, held steady at $178.4 billion, just 0.06 per cent higher than that previously.
Loans for share financing were down by 2.29 per cent, compared with a month earlier.
Car loans and credit card loans also dipped slightly.
Barclays director of research Leong Wai Ho told The Straits Times that the overall system loan-to-deposit ratio, which remains high at close to 110 per cent, is putting constraints on those looking to borrow.
“The hike in Singapore interbank offered rate (Sibor) has contributed to the decline in bank lending as well, with the banks known to pass on the increases faster to loans rather than deposits.”
The three-month Sibor hit 1.01446 per cent yesterday, its highest since December 2008.
Mr Leong expects the downward trend to continue, and even quicken its pace slightly. But he added that it is less an indicator of Singapore’s economic performance than a reaction to the rising loan-to-deposit ratio and Sibor rates.
“Loan demand has been quite steady since last year, and lending activity hasn’t dropped off.
“Given that the increase in Sibor rates was more pronounced in March, people are still waiting to see if this is permanent before adjusting their behaviour,” said Mr Leong.
Credits: AsiaOne Business & ST