Thursday, March 1, 2012

Business loans at a standstill in January

Business Times: Thu, Mar 01
(SINGAPORE) Bank loans to businesses showed zero growth in January, adding to concerns that the Singapore economy faces a sharp slowdown this year.

Some $240.8 billion worth of business loans were outstanding at the end of January, barely changed from a month earlier, after rising 0.3 per cent in December. Compared to a year ago, business loans were 37.4 per cent higher, though that was slower than the 40.7 per cent year-on-year growth in December.

Consumer loans grew one per cent in January to $181.3 billion, slower than the 2.2 per cent growth in December.

But the latest data from the Monetary Authority of Singapore need to be interpreted with caution. Since the data aren't seasonally adjusted, the changes in loan volumes are likely to have been distorted by the Chinese New Year holiday, which was in January this year, but in February last year.

But any expansion in bank lending this year is likely to be muted, given the uncertain outlook for the world economy and the projected slower growth for Singapore, analysts say.

All three Singapore-listed banks have said that they expect loan growth this year to be much slower than last year...

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Martin Koh/ Sherry Tang
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