Business loan growth sinks into the red for the first time since Lehman crisis

Weighed down by cloudy global outlook.

Business loan growth in Singapore dipped into the red for the first time since the Lehman crisis in April, according to a report by DBS Vickers.

DBS noted that this reflects significant downside risk to growth if the downward trend persists in the coming months.
“ While global outlook remains cloudy, pressure from domestic restructuring and risk of higher interest rate are weighing down on business confidence and affecting companies’ willingness to invest,” said the report.

The faster pace of consumer loan growth is also a cause for concern, the report added.

“The concern on household leverage continues to linger April marks the fourth consecutive months whereby consumer loan growth outpaced business loan growth. Indeed, businesses are responding to the risks of higher interest rates and dicey growth outlook more spontaneously than consumers,” said DBS.