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Singapore's bank lending continued to grow for second month in December 2020

Amala Balakrishner
Amala Balakrishner2/2/2021 7:55 PM GMT+08  • 3 min read
Singapore's bank lending continued to grow for second month in December 2020
Singapore’s bank lending increased in December, thanks to the continued growth in housing loans.
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Singapore ended 2020 with an increase in its bank lending for the second consecutive month in December, thanks to the continued growth in housing loans.

Total loans from the domestic banking unit – which captures lending in all currencies, but mainly reflects Singapore dollar lending – came in at $678.72 billion. This is up 0.3% from the $676.67 billion disbursed in November 2020, the Monetary Authority of Singapore (MAS) revealed.

December’s showing was led by a 0.5% uptick in consumer loans to $269.62 billion. A substantial contributor to this was housing loans which had climbed 0.4% to $201.36 billion.

The segment accounts for data across three quarters of consumer lending. The increase comes as the prices of new private homes – particularly non-landed properties - in Singapore had risen by 2.1% q-o-q in 4Q2020, to record its steepest quarterly increase in the last two years.

Similarly, unsecured personal loans, excluding credit cards, had risen by 0.6% from the previous month, to hit $37.82 billion in disbursements. Other consumer loans were also up, with car loans inching up by 0.2% to $8.35 billion, while credit card loans had risen by 1.7% to $10.31 billion.

Loans for share financing was the only segment under consumer loans to record a decline in December. Lending for the segment had inched down by 0.8% from the previous month to hit $1.78 billion.

Meanwhile, loans to businesses reversed into the green after an eight-month decline with a 0.2% m-o-m increase to $419.12 billion.

SEE: Singapore's bank lending slows for eighth month following drop in loans to businesses

A substantial lift came from a 4.9% increase in loans to financial institutions to $101.34 billion. This marks the first time the segment is recording a growth in four months.

Loans to professionals and private individuals was up by 0.9% to $9.09 billion in December, while that to business services came in flat at $11.30 billion.

Contractions in loan disbursements were seen across the other segments, with general commerce and transport sectors recording the deepest declines of 1.6% and 2.2% respectively.

This translated to $62.57 billion in loans disbursed to the general commerce sector and $25.20 billion for transport.

Loans to the building and construction industry – the single-largest business lending segment – was also down by 0.6% to hit $149.99 bullion.

On a year-on-year basis, total bank lending was down by 2% in December. In this time, total business loans was down by 2.4% while consumer loans had slid by 1.2%.

Shares of all three banks were down on Feb 2, with OCBC dropping 2 cents or 0.19% to $10.35 and UOB dipping by 10 cents or 0.43% to $23.45. DBS meanwhile closed at $25.27, up 3 cents or 0.12%.

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