Chart of the Day: Banks' loan growth hits record low as client demand dries up

Don't expect a recovery anytime soon.

Singapore's banking sector is experiencing retrenchment after years of rapid credit growth. This chart from BMI Research shows that there has been a decline in total outstanding loans from both Domestic Banking

Units—which represents loans denominated in Singapore dollars— and Asian Currency Units—which represent loans denominated in foreign currencies.

Both ACU and DBU peaked in August 2015, and have stagnated since. e. On aggregate, total credit extension via DBUs and ACUs fell by 5.4% year-on-year in March,
the deepest contraction since September 2009.

The fall in outstanding credit is symptomatic of the myriad headwinds faced by the banking sector: a
mediocre domestic growth outlook, a continued downturn in the domestic residential property market, and a structural slowdown in the Chinese economy.