Loan growth bottoms out in September

It was visibly off the bottom of -2.7% in July.

With the improvement in loan growth being broad-based, it could be an indication that the financial services cluster may have reached a cyclical trough, a report  by DBS Group Research stated.

According to the brokerage firm, loan growth has bottomed. The headline number registered -0.8% in September 2016. While it remains in the red, it is up from -1.6% in the previous month and visibly off the bottom of -2.7% in June.

"The improvement has been broad-based, with corporate loan growth being less negative and consumer loan growth rising higher," DBS noted.

The firm furthered, "Most importantly, this could be an indication that the financial services cluster may have reached a cyclical trough. This will have positive implications on Singapore's growth outlook since the financial services cluster alone has accounted for about a third of overall GDP growth in the past four years."

However, DBS argued that it has been struggling in the past one year as falling loan growth – on top of the increasingly challenging economic climate, risk aversion in the financial markets, as well as the consolidation in the banking sector – have all weighed on the performance of the cluster.