Check out which loans had disastrous performances in September

Only retail and housing loans fared well.

According to Barclays Research, the MAS monetary statistics showed weaker loan growth momentum in September. System (DBU+ACU) loans was flat m/m (vs +1.9% in Aug) in SGD terms.

Here's more from Barclays:

Growth in retail and housing loans offset a contraction in corporate loans m/m. Going forward, we see headwinds to loan growth as corporate credit and mortgage demand falls. Our top pick is UOB (OW) and we least like DBS (UW).

Loan growth affected by strong SGD: System (DBU+ACU) loans was flat m/m (vs +1.9% in Aug) and +7.1% ytd in SGD terms. After adjusting for strength of the SGD against the USD which appreciated by 2.2% in September, system loan growth rose 1.1% m/m (vs 1.5% in Aug) and 9.5% ytd.

DBU and ACU loans rose by 0.7% m/m and 1.5% m/m (US$) respectively. DBU deposits contracted by -0.3% m/m while ACU deposit grew strongly at 2.9% m/m (US$). Overall, deposits grew at a similar pace to loans and resulted in a stable system loan-to-deposit ratio m/m at 94.4%.

Loan growth driven by retail and housing loans: Retail loans recorded momentum growth of 1.2% m/m while corporate loan balance contracted by 0.4% m/m.

Housing loans showed strong growth of 1.1% m/m and 11% ytd, reflecting decent residential property transactions in the past few months. However, we see rising headwinds as the government clamps down further with property cooling measures. Residential property transaction value declined by 21% m/m in September.

Loans to financial institutions and the building and construction sector rose, while all other segments experienced a decline. DBU corporate loans rose by only 0.2% m/m (vs 3.1% in Aug) and 13.4% ytd, which we believe is due to slowing economic growth affecting corporate activity.

ACU loans rose by 1.5% in USD terms, but declined by 0.7% m/m due to currency translation loss to SGD.

We believe that Singapore banks are still on track to meet their guidance of high single-digit loan growth for FY12E, but see headwinds to FY13E loan growth as corporate credit and mortgage demand slows.

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