Financial sector sees no light at the end of the tunnel for Q4

Bank lending crept down 2.2%.

Despite the modest outlook for local business in Q4, the financial sector remains at the edge of their seats, with its sentiments falling slightly in some indicators.

According to Singapore Commercial Credit Bureau's latest quarterly Business Optimism Index (BOI), the slowdown in bank loan growth as well as lacklustre performance in the insurance sector took a jab at the sector's' outlook.

To recall, Singapore's bank lending continues to creep lower, recording a 2.2% decline in July from a year ago. Total loans for the month dipped from $610.4 billion last year to $597.23 billion.

More so, Ministry for Trade and Industry, data showed that the finance and insurance service sector shrank 11.2% in the second quarter, with banks mainly to blame.

Based on the data, the financial sector's outlook on volume of insurance sales dipped from a peak of 25% in the year to 12.5%.

"Both volumes of insurance sales and new orders have moderated downwards visibly from +25.0 percentage points in Q3 2016 to +12.5 percentage points in Q4 2016," the report noted.

In 2014, the sector’s BOI for volume of sales peaked 83.3% for 2Q, only to fall 13.3% the consecutive quarter.

On the other hand, net profits are anticipated to remain expansionary at 37.5%.

"Meanwhile, selling price, inventory levels and employment are expected to remain unchanged at 0 percentage point," the report said.