Higher credit card and car loans pushed bank lending up.
Singapore bank lending rose 8.5% YoY in February 2018 and hit its strongest pace in three years, up from an 8.3% climb in January.
According to RHB Research, this was mainly on the back of stronger growth in consumer loans at 5.5% YoY during the month from +4.6% in the prior period. “This was amidst a pick-up in credit card and car loans, as well as loans extended for share financing,” it said.
Moreover, corporate loans grew by a stronger pace of 9.5% YoY in February from +9.3% in the preceding month. “This was on the back of a pick-up in loans extended to the manufacturing sector, whilst loans to the agriculture and transport & storage industries fell by a smaller margin. However, this was partly offset by the slower growth in loans extended to the building & construction and business services sectors,” RHB Research added.
On a monthly basis, total loans picked up to 1.2% in February from a +0.4% increase in the month before, mainly due the stronger growth in business loans. Meanwhile, consumer loans fell during the month.
Separately, Singapore’s money supply, including Asian currency units, grew 5.8% YoY in February from a +4.5% rise in the month before. “This was mainly on the back of a stronger growth of 6.3% YoY in net foreign positions during the month from +5.7% in January. These were, however, partly offset by slower increases in both public and private credit growth,” RHB said.
RHB expects the M3 to grow even further by +6.2% in 2018 from 4.1% in 2017. “This is premised on a strong SGD, rising economic prospects, and a pick-up in property transactions,” it added.
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