01-06-2012, 06:47 AM
The Straits Times
Jun 1, 2012
Growth in bank lending slows
Worries over Europe and China put brakes on business loans' expansion
By Magdalen Ng
TOTAL bank lending here edged up just 0.6 per cent to $435.2 billion in April, from a month earlier.
This snail's pace of growth was significantly slower than the 1.5 per cent month-on-month expansion in March.
But compared with April last year, the total sum lent jumped by 23.9 per cent.
The month-on-month stagnation was mainly due to the slowdown in business loans' growth, while lending to consumers remained relatively constant.
Total loans to businesses grew 0.4 per cent to $249.8 billion, markedly less than the 1.5 per cent growth in March.
General commerce loans declined by 1.1 per cent to $49 billion, while lending to non-bank financial institutions such as fund management companies and real estate investment trusts remained flat at $55.9 billion.
Loans to the manufacturing sector grew 2.4 per cent to $21.4 billion, and building and construction loans expanded 1 per cent to $70.6 billion.
Consumer loans growth, on the other hand, grew 1 per cent to $185.5 billion, close to March's growth rate of 0.9 per cent.
There was growth across most consumer segments. The greatest increase was in share financing, which surged 10.8 per cent in April to $1.1 billion.
Housing and bridging loans were up 0.9 per cent to $136 billion, and credit card loans were up 0.72 per cent to $7.8 billion.
Analysts expect this slowing trend in business loans to continue, given the uncertainties in the global economy, which may prompt businesses to put a hold on their expansion plans.
DMG & Partners Research analyst Leng Seng Choon explained that since the beginning of last month, major concerns about Europe's debt crisis have started to resurface, which will invariably lead to some movements on the market.
He added that if Greece leaves the euro zone, there will be a significant impact on loans.
Worries over China's slowing growth have also affected market sentiment.
This is also in line with the general expectation that loans growth for the year will moderate to about 10 per cent from last year's rapid pace of 27 per cent.
Bank of America Merrill Lynch economist Chua Hak Bin said: 'This significantly slower loans growth may mean that the prospects for the banking sector may be somewhat dampened.'
songyuan@sph.com.sg
Jun 1, 2012
Growth in bank lending slows
Worries over Europe and China put brakes on business loans' expansion
By Magdalen Ng
TOTAL bank lending here edged up just 0.6 per cent to $435.2 billion in April, from a month earlier.
This snail's pace of growth was significantly slower than the 1.5 per cent month-on-month expansion in March.
But compared with April last year, the total sum lent jumped by 23.9 per cent.
The month-on-month stagnation was mainly due to the slowdown in business loans' growth, while lending to consumers remained relatively constant.
Total loans to businesses grew 0.4 per cent to $249.8 billion, markedly less than the 1.5 per cent growth in March.
General commerce loans declined by 1.1 per cent to $49 billion, while lending to non-bank financial institutions such as fund management companies and real estate investment trusts remained flat at $55.9 billion.
Loans to the manufacturing sector grew 2.4 per cent to $21.4 billion, and building and construction loans expanded 1 per cent to $70.6 billion.
Consumer loans growth, on the other hand, grew 1 per cent to $185.5 billion, close to March's growth rate of 0.9 per cent.
There was growth across most consumer segments. The greatest increase was in share financing, which surged 10.8 per cent in April to $1.1 billion.
Housing and bridging loans were up 0.9 per cent to $136 billion, and credit card loans were up 0.72 per cent to $7.8 billion.
Analysts expect this slowing trend in business loans to continue, given the uncertainties in the global economy, which may prompt businesses to put a hold on their expansion plans.
DMG & Partners Research analyst Leng Seng Choon explained that since the beginning of last month, major concerns about Europe's debt crisis have started to resurface, which will invariably lead to some movements on the market.
He added that if Greece leaves the euro zone, there will be a significant impact on loans.
Worries over China's slowing growth have also affected market sentiment.
This is also in line with the general expectation that loans growth for the year will moderate to about 10 per cent from last year's rapid pace of 27 per cent.
Bank of America Merrill Lynch economist Chua Hak Bin said: 'This significantly slower loans growth may mean that the prospects for the banking sector may be somewhat dampened.'
songyuan@sph.com.sg