Singapore’s total bank loans growth accelerates in October, likely to grow 5.7 pct in 2017

Total bank loans growth in Singapore accelerated to 6.8 percent year-on-year and to 1.4 percent sequentially in October from 6.2 percent year-on-year and 1 percent sequential in the prior month. Business loans growth, which accelerated to 8 percent year-on-year, drove the pick-up, aided by loans to financial institutions, business services, general commerce and transport/storage.

Consumer loans growth continued to be resilient and grew 3.8 percent year-on-year and 0.6 percent sequentially in October, even if housing/bridging loans eased slightly from 4.2 percent year-on-year to 4.1 percent year-on-year. This was countered by a rebound in car loans and share financing.

Even if the bank loans growth in October was better than anticipated at 6.8 percent year-on-year and brought the initial ten months’ performance to a strong 6 percent year-on-year, there might be a modest pullback for the remainder two months of this year, noted OCBC Bank in a research report. Bank loans are expected to grow 5.7 percent year-on-year in the whole of 2017.

Meanwhile, domestic labor market conditions saw improvements in the first half of 2017, according to MOM data. Median income of full-time employed residents accelerated from 2.7 percent in June 2016 to 4.3 percent in June 2017 in nominal terms and 3.7 percent in real terms. Moreover, the jobless rate and long-term unemployment rates for PMETS also rebounded to 3 percent and 0.9 percent respectively.

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