Bank lending in January up 16% on-year

Bank loans in Singapore for January rose 1.8 per cent to S$328.7 billion from the previous month.

This is a 16 per cent increase compared to a year ago, according to provisional bank lending data from the Monetary Authority of Singapore.

All segments recorded a rise, with the manufacturing segment posting the strongest loans growth at 2.5 per cent to S$11.2 billion from December.

Housing and bridging loans continue to be the largest contributor at S$114.16 billion from S$112.4 billion the previous month.

Mr PK Basu, chief economist for Asian ex-Japan at Daiwa Institute of Research, said low interest rates have fuelled the demand for housing loans.

On measures taken by the government to cool the property market, Mr Basu said, “We’re seeing that transaction volumes have moderated quite sharply since the measures were announced in the middle of January. Those were really very stringent measures and they’ve had some impact for sure.”

Analysts say that growth in housing loans could moderate in February.

Meanwhile, credit cards loans saw a decline of 0.8 percent from December to S$6.8 billion – the biggest month-on-month fall in 10 months.

Analysts say this could mean consumers are getting more apprehensive about spending, especially on credit, due to inflation and rising costs.

Despite this, retail numbers have grown in the past few months, said Roger Tan, vice-president for SIAS Research.

“Looks like most of the retail sales are coming from foreign visitors coming to Singapore rather than the locals themselves. So, that could explain why the credit card debt is a lot less now”, said Mr Tan.

Source : Channel NewsAsia – 28 Feb 2011

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