Chart of the Day: See how Singapore's deposits ebbed and flowed due to M&As

They have increased, mostly.

Singapore’s deposits have declined from $548 billion in March to $535 billion this quarter, despite financial institutions continuing to make loans, a report by OCBC says.

In the first half of 2014, total SGD deposits fell by 2.4 billion though total loans increased by 20.5 billion. OCBC enumerates possible reasons behind the capital outflows: 1) M&A activities include Temasek’s agreement to purchase a 24.95% stake in Hong Kong’s AS Watsons for US$5.7bn and
OCBC’s agreement to acquire Wing Hang Bank. 2) Companies or individuals borrowed SGD and swaps SGD to other currencies for offshore loans. 3) Deposit disintermediation due to low nominal and real deposit rates.

OCBC adds that according to Dealogic, Singapore holds the top spot among other Southeast Asian Countries as the top acquirer nation for cross-border M&A, with a 2014 June YTD volume of USD24bn. Leading the deals were Oversea-Chinese Banking Corp’s pending acquisition for Wing Hang Bank Ltd announced in April and Frasers Centrepoint Ltd’s bid for Australand Property Group announced in June.

According to MergerMarket, Singapore remained the most active bidder for M&A deals across all the Southeast Asian countries in 2013 with an outbound acquisition volume of USD17.4bn, a 74.1% yoy increase over 2012’s USD10bn.