SINGAPORE (Dec 1): Bank loans contracted for the second consecutive month in October, compared with the previous month while system loan growth was what Barclays calls a “mere” 1.2%, latest statistics from the Monetary Authority of Singapore show.

Although weak loan demand is a problem for Singapore’s banks, Barclays believes the outlook for next year is somewhat rosier.

“We believe loan yields will remain stable over the next few quarters with potential upside when US interest rates rise. Moreover, market-related fee income could potentially pick up in 4Q15 after the sharp equity market correction and weak investor sentiment in 3Q15, in our view,” Barclays says.

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