Chart of the Day: No help in sight for Singapore’s plummeting bank loans

It’s the longest yoy decline since 2002.

Banks are starting to feel the chill as lenders have second thoughts about borrowing amid cautious business sentiments and the slowing economy.

According to analysts from OCBC, business loans deteriorated further for the fourth straight month by 3.7% in December, overpowering the positive loan growths in building/construction and transport and storage.

OCBC added that the consumer loan growth also eased to 2.7% as housing/bridging loans moderated to 4.1% yoy in December.

“Interestingly, there was a spike in share financing which surged 129.1% yoy to a record high of $2.27b in Dec15, which could be a response to the stock market volatility,” OCBC said.

Meanwhile, there seems to be no aspirins in the banks’ medicine cabinets as OCBC said no near-term catalyst have been seen to raise loan growth just yet.

“The full-year bank loan growth came in at a sluggish 1.1% yoy, which marked the slowest since 2002 (+0.6% yoy), which is in line with the tepid 2.1% headline GDP growth seen last year. We probably could continue to see flattish loans growth for 1H16 given the weak domestic business sentiments,” OCBC said.