Consumer loans rise despite drag from building and construction loans
BANK lending eased in July, reversing a modest increase in the previous two months, as a drop in building and construction loans ate into a continued rise in consumer housing loans.
But economists say that the drop in loans for construction is more likely a blip than the start of a worrying trend.
The total amount of Singapore-dollar loans held by banks here dipped 0.1 per cent over the month to $271.8 billion at end-July, estimates from the Monetary Authority of Singapore show. This followed an expansion in overall bank lending of 0.5 per cent in June and 0.3 per cent in May, which fuelled optimism that credit demand and supply could be recovering.
Compared with a year earlier, total loan volume at end-July was still 2.3 per cent higher.
Loans to businesses fell for a ninth straight month, to $151.8 billion at end-July, 1.1 per cent lower than at end-June.
The drop in business loans to the building and construction sector was the main reason for the fall. Outstanding loans to the sector shrank by $1.3 billion, or 2.6 per cent, over the month to $48.8 billion at end-July – the lowest level since end-September last year. Continue reading
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