Broad weakness seen in business loans in Sept as MAS data shows 0.2% dip

Singapore

LENDING to several business segments slipped, or remained, in negative territory in September from a month ago, contracting overall bank lending for the month.

Preliminary data from the Monetary Authority of Singapore showed on Wednesday that business lending inched down 0.2 per cent to S$404 billion in September from August, swinging from a 0.6 per cent rise the previous month.

The broad weakness across business lending came as construction loans - the single-largest business lending segment - fell in September for the first time on a month-on-month basis since January this year. It stood at S$130 billion in September, down 0.1 per cent, reversing from a 2.5 per cent gain posted in August.

Loans to financial institutions - the second-largest business lending segment - continued their decline since May this year, though this has decelerated for two straight sessions. Lending to financial institutions stood at S$102 billion, down 0.7 per cent in September.

Lending to general commerce firms also slipped, as did lending to manufacturing companies, business services firms, and agriculture and mining companies.

Consequently, bank lending in Singapore dipped in September from a month ago. Loans through the domestic banking unit - which captures lending in all currencies, but reflects mainly Singapore-dollar lending - stood at S$669.5 billion, down from S$669.9 billion a month ago. This represented a 0.1 per cent contraction from August, and reversed from a 0.4 per cent gain recorded that month.

Total consumer loans were lifted slightly by 0.2 per cent to S$266 billion in September, compared to flat growth in August. This was largely driven by credit-card lending, which rose 1.8 per cent in September from a month ago to S$11.1 billion. The increase in credit-card lending compared to a mere 0.3 per cent gain posted in August.

Mortgages, which make up the bulk of consumer lending, stood at S$204 billion, gaining in September at the same pace as it did in August at 0.1 per cent.

From a year ago, total lending rose 4.5 per cent, which is weaker than the 5.6 per cent gain posted in August.