Property accounts for 28% of banks’ outstanding non-bank loans

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on Monday that property-related exposures accounted for 28 per cent of Singapore banks’ total outstanding non-bank loans.

He said this in a written answer to a parliamentary question filed by Mr Gan Thiam Poh (MP for Pasir Ris-Punggol) on the exposure of financial institutions to housing and real estate development financing.

Mr Tharman said housing loans accounted for 17 per cent while loans to property developers and construction companies accounted for the other 11 per cent. Of the housing loans granted, more than 70 per cent were for owner-occupied residential properties.

He also said the Monetary Authority of Singapore conducted regular stress tests on banks and insurance companies in Singapore to assess their ability to withstand adverse financial and economic shocks, including a sharp correction to property prices.

The most recent test conducted in 2012 showed that all major financial institutions would continue to maintain adequate capital buffers above MAS’ regulatory requirements under the stress scenarios.

Mr Tharman said the Government would continue to watch the property markets closely and take steps when necessary to avoid a bubble that could hurt borrowers and destabilise Singapore’s financial system.

Source : CNA – 13 May 2013

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