Singapore bank lending dips for 2nd straight month: MAS data

Total lending in April stood at $689.7 billion, down from $692.4 billion in March.ST PHOTO: CHONG JUN LIANG

SINGAPORE – Bank lending declined for the second consecutive month in April, with consumer loans taking a bigger hit than business loans from the disruption caused by Covid-19 measures.

Total lending dropped 0.4 per cent to $689.7 billion in April, from $692.4 billion in March. It rose 2 per cent over the same month last year, preliminary data from the Monetary Authority of Singapore showed on Friday (May 29).

Total business lending last month dipped 0.1 per cent to $433.8 billion, from $434.2 billion in March, with loans to the various segments mixed.

Sectors such as agriculture, construction and transport, storage and communication saw small increases in lending, compared with March.

But financial institutions and businesses in manufacturing and general commerce did not borrow as much over the same period.

Consumer loans shrank across all segments, falling 0.9 per cent to $255.9 billion in April, from $258.2 billion in March.

Maybank Kim Eng economist Lee Ju Ye noted that Singapore’s circuit breaker measures have had a bigger impact on loans to consumers compared with loans to businesses.

The various financing schemes, such as the Temporary Bridging Loan Programme and the Enterprise Financing Scheme, that the Government implemented as part of its fiscal support measures may have cushioned the impact on business loans, she said.

For consumer loans, the closure of retail and food and beverage outlets, and travel restrictions in particular, resulted in a plunge in credit card loans, Ms Lee noted.

“The closure of car dealerships and showrooms (and) the suspension of COE bidding exercises in April have also driven car loans to a four-year low,” she said.

The MAS data showed that credit card loans in April shrank 8.9 per cent to $9.7 billion from $10.6 billion in March – and were down a sharper 13 per cent year on year.

Car loans dropped 1.4 per cent month on month to $8.7 billion from $8.8 billion in March, and were 3 per cent lower than a year ago.

Housing loans, which make up three-quarters of consumer loans, inched down 0.1 per cent to $200.06 billion in April, from $200.3 billion in March.

“Consumer loans will likely stay weak in May and June, before improving steadily in July as consumer-related businesses reopen by then,” said Ms Lee.

“Source:[Singapore bank lending dips for 2nd straight month: MAS data] © Singapore Press Holdings Limited. Permission required for reproduction”

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