Lending was boosted by strong demand from manufacturing, transport, and business services.
Singapore bank lending maintained its positive momentum after rising from 9.9% in June to 10% in July, extending its strongest pace in almost four years, according to data from Department of Statistics (SingStat) and RHB Research.
The sustained growth was backed by the a slight pick-up in business loans which rose from 11.4% in June to 11.8% July on the back of strong loan demand in manufacturing, transport & storage, and business services.
Meanwhile, consumer loans slipped to 4.9% YoY from 5.5% in June due to a broad-based slowdown in the growth of housing, car, and credit card loans.
For deposits, growth rose to 1.4% YoY from 0.7% in June due to a boost in deposit growth by government and statutory boards, as well as higher growth in non-resident deposits.
“With the rising SIBOR rates and a bias towards tightening by the Monetary Authority of Singapore (MAS), we expect M3 and loans to grow moderately at 5% from 7.3% in 2017,” RHB said.
“However, loan growth is expected to buck the trend and record growth of 8.5% in 2018 from 6.1% 2017, due to the strong momentum in loans to businesses.”
Banks are expected to maintain their strong lending momentum in the coming quarters as the government’s surprise cooling measures, which are widely expected to hammer housing loans, are expected to hit lenders only by 2019, according to an earlier flash note from DBS.
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