Bank Lending In November Hits Record Pace Too

Source : The Business Times, January 1, 2008

DOMESTIC bank lending here grew at another record pace in November, despite the breather seen in the property market that has led to a momentum slowdown in related loans.

According to preliminary data released by the Monetary Authority of Singapore, total property-related loans - including housing loans and lending to building and construction businesses - grew at a monthly pace of 1.4 per cent in November, from 3.2 per cent in October. On a yearly basis, however, property-related loans rose 19.3 per cent to $107.2 billion.

Such loans continued to boost banks' lending business here, which chalked up total loans and advances of $226.5 billion in November. This is 16.3 per cent higher than in November 2006 and the fastest rate of total bank loan growth in more than 10 years.

Lending to building and construction firms jumped 29 per cent to $34.5 billion. This is the highest growth rate since 1995, when loans in this category were bursting above the 30 per cent growth mark as the market experienced a rise in property investments.

In the same month, home buyers borrowed $72.7 billion, or 15.2 per cent more than in the year-ago period. This is, however, faster than the 14.3 per cent growth rate seen in October.

Total loans to businesses went up 19.4 per cent to $121.5 billion, while consumer loans rose 12.9 per cent to $105 billion.

Lending to most business segments saw growth. Transport, storage and communication firms borrowed 40.9 per cent more than a year ago, or a total of $9.1 billion in November. Borrowing by business services companies surged 36 per cent to $4.7 billion, while that by financial institutions and general commerce firms went up 19.1 per cent and 10.6 per cent respectively, to $28.2 billion and $22 billion.

On the other hand, manufacturing firms borrowed less. Loans in this segment continued their eighth month of year-on-year decline, falling 4.4 per cent to $10.4 billion. Loans to businesses engaged in agriculture, mining and quarrying also fell 14.8 per cent to $287.5 million. Within consumer loans, share financing lending registered the biggest growth, at 53.6 per cent, to $1.3 billion.