Loans approved by banks in Singapore have increased by 0.6 percent in the month of August when compared to a month ago, according to the Monetary Authority of Singapore. The increase is attributed to the rise in business loans in the country’s banking sector.
Loans approved by domestic banks in Singapore stood at S$684.9 billion in August, up from S$680.7 billion a month ago.
According to data issued by the Monetary Authority of Singapore, consumer loans have decreased by 0.2 percent to S$262.1 billion in the month of August. On the other hand, business loans approved by banks in Singapore have increased by 1.1 percent to S$422.7 billion during the same period.
Housing loans in Singapore, which accounts to three-fourth of consumer lending in the country have contracted for the eight consecutive months. In the month of August, housing loans dropped by 0.2 percent to $201.37 billion when compared to a month ago.
Total lending increased by 2.2 percent year on year.
A recent research report shows that factors such as like GDP, unemployment, Sibor changes are not the major contributor to non-performing loans (NPL) in Singapore. But it is Singapore banks’ overseas exposure which will contribute to NPL during the second quarter this year.
According to Maybank Kim Eng research analyst Thilan Wickramasinghe, the pace of non-SGD loan growth, domestic inflation, and the rate of change in special-mention loans have the strongest influence in setting the direction of NPLs.
In the second quarter this year, the NPL ratio for Singapore’s top three banks – DBS Bank, OCBC Bank, and United Overseas Bank stood at 1.5 percent.