Chart of the Day: Singapoire banks' system loan to deposit ratio slipped to 99%

As system loans rose 0.9%.

According to Barclays, the July monetary statistics of the Monetary Authority of Singapore showed a mild contraction of ACU loan growth (mainly foreign currency), while ACU deposits rose, despite volatility in ASEAN markets in July. 

The system loan to deposit ratio moderated slightly to 99% (from 100%) as deposits rose.

Here's more from Barclays:

We believe Singapore banks are defensive to potential liquidity outflows from Asian Emerging Markets and are key beneficiaries of rising interest rates in the medium term. However, we see a lack of near-term positive catalysts as loan growth moderates and margins remain stable. 

System loans in July rose 0.9% m/m (10.6% ytd) and 0.6% m/m on a constant currency basis after taking into account mild USD appreciation against the SGD in July.

In particular, ACU loans contracted by 0.2% in US$ terms (+0.5% in SG$ terms), led by a slowdown in loans to the transportation & communication (-5% m/m), building & construction (-5% m/m), and manufacturing (-0.5%) industries.

DBU loan growth was steady at 1.2% m/m, and was mainly driven by general commerce/trade finance +2.2% h/h (26% ytd).

Pace of growth in general commerce and manufacturing loans have moderated since earlier this year and in our view now better reflect genuine trade activity as Chinese regulators clamped down on RMB/USD interest arbitrage trade lending in June.