You won't believe this drove loan growth up by 6.6%

Housing loans thrived amid 46% decrease in home sales.

According to Barclays, the MAS July monetary statistics showed continued underlying loan and deposit growth momentum. System (DBU+ACU) loans rose 1% m/m and 6.6% ytd (excluding the impact of US$ depreciation against S$), mainly driven by retail and housing loans.

Here's more from Barclays:

Currency-adjusted system deposit grew 1.3% m/m, results in a slight ease of loan-to-deposit ratio. We believe Singapore banks can achieve high single digit loan growth targets this year. We still most prefer UOB (OW).

Solid underlying loan and deposit growth after currency adjusting: System loan growth was solid at 1% m/m and 6.6% ytd after adjusting for a 2.2% appreciation in the SGD against the USD. DBU and ACU loans grew at 1.3% m/m and 0.7% m/m (US$) respectively. Meanwhile, currency-adjusted system deposit balance rose 1.3% m/m in July. Growth of DBU and ACU deposits were strong at 1.2% m/m and 1.5% m/m (US$), respectively. As a result, system loan-to-deposit ratio eased slightly to 94% (vs. 94.4% in June).

Loan growth driven by retail and housing loans: Retail loans recorded momentum growth at 1.5% m/m while corporate loan balance contracted by 0.7% m/m. Housing loans continued strong growth at 1.4% m/m and 8.3% ytd, despite 46% decreased in residential property transaction value in June/May. Building and construction loans grew 0.8% m/m, the fastest among all sectors in corporate loans. ACU loans rose by 0.7% in US$ terms, but declined by 1.7% m/m due to currency translation loss to S$. We believe that Singapore banks are still on track to meet their guidance of high single digit loan growth for FY12E.