Analyst sees stunted loan growth for 2012

Loan growth this year will be “sharply lower” than DMG Research’s ~30% estimate for 2011.

The analyst said that while systematic loans picked up 2.3% MoM for November compared to the October rate of 0.35%, Singapore’s conservative outlook of 1-3% GDP growth for 2012 will curb loan growth.

After contracting 0.1% MoM in Oct 11, business loans grew 2.9% in Nov 11, due to gains in general commerce and building & construction loans. Consumer loans, meanwhile, expanded a milder 1.4% MoM. 

Despite an unattractive performance for 2H11, DMG Research said UOB is the “best pick” among the three banks given the slowing economic environment. 

The analyst said the bank’s short conservative loan stance—with a slower-than-peers loan growth and greater focus on lower-risk housing loans—will contribute to a higher-than-peers loan quality.