Banks' loan growth spoiled by business loans’ unexpected slip

Loan growth simmered down to 0.6%.

Singapore banks’ loan growth could have had a smooth sailing season, but business loans couldn’t build on its three straight months of growth, as they defied analysts’ predictions and fell by 1.0% yoy.

According to analysts from OCBC, building and construction loans showed better promise, accelerating to 20% yoy.

However, OCBC says this was offset by loans to financial institutions, manufacturing, and general commerce, which fell 15.8%, 11.3%, and 8.2% respectively.

OCBC adds that the business loans slip is also the first on-month decline since April 2015, indicating faltering business confidence in the last six months.

“Consumer loans rose 3.1% yoy (+0.2% mom) amid healthy housing loans which rose 4.8% yoy (+0.5% mom) as drawdowns for existing mortgage loans sustained,” OCBC said, enumerating some bright spots in loan growth.

Meanwhile, OCBC says the latest manufacturing and services expectations survey outlook were the weakest readings since June 2009 and Dec 2011 respectively.

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