Singapore bank loans shrink to 2.9% in Q1

Consumer loan growth slowed to just 0.3% in March.

Singapore banks' loan growth dropped sharply to 2.9% in Q1 from 4.8% in the same period in 2018 as the consumer lending front suffered heavy declines from the cooling housing market, according to a report from OCBC.

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Bank loan growth slowed to 2.2% in March from 3.3% in February in what marks the slowest pace of expansion since November 2016.

Business loans growth eased to 3.4% yoy in March from 5.2% in February as general commerce loans fell for the
eight consecutive month by 2.6% yoy. The headline figure was partially offset by double-digit growth in transport, storage and communications and building and construction loans.

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Consumer loans also continued shrinking to just 0.3% in March from February’s 0.5% yoy and marking the slowest pace since at least 2005.

"The main drag came from housing loans growth which decelerated to just 0.9% yoy in March, the lowest since at least 1992, reflecting the ongoing cooling in the domestic private residential property market," Selena Ling, analyst at OCBC said in a report.