Singapore Bank Lending Cools

Bank lending in Singapore declined month-on-month for the first time since January this year, though it maintained a still strong year-on-year growth, preliminary data from the Monetary Authority of Singapore showed on Friday.

Loans through the domestic banking unit stood at $667.53 billion in July, down 0.8% from the record $673.25 billion reached in June, but up 6.9% from $632.60 billion a year ago, CNA reported.

The month-on-month dip was due to the drop in business lending which shrank 1.4% to $402.46 billion from $407.97 billion in June.

Loss in monthly loan momentum came as loans to financial institutions, the general commerce sector, manufacturers, transport and storage sectors saw modest declines. Year-on-year, business loans rose 6.9% from $377.71 billion in July 2017, just off June’s 7% increase, which was the fastest since November.

Consumer lending in July came in at $265.07 billion, almost unchanged from $265.28 billion in June, but up 4% from $254.88 billion a year ago.

Last-minute buying to beat the latest round of property cooling measures that took effect on July 6 supported housing and bridging loans that month, as they clocked in at $203.38 billion, up 0.2% from June’s $203.04 billion, and a 4% increase from $195.49 billion a year ago.

The reprieve may be temporary though. Singapore banks are bracing for a slowdown in home loans given the latest property curbs. Global trade frictions may also have a bigger impact on business sentiment and spending going forward.

Meanwhile, Singapore’s financial services industry has been subjected to disruption, and new skills are needed, but only one in three financial practitioners indicated in a recent online poll that he was proactively taking steps to acquire necessary skills.

With their jobs experiencing disruption by technology, NTUC assistant secretary-general Patrick Tay said workers in the industry need to be more aware of training opportunities.

In a blog post he wrote on LabourBeat.org Friday: “With the rise of technologies such as robotic process automation, chatbots, mobile banking, blockchain and data analytics against a backdrop of tightening regulatory demands, financial sector workers can expect their jobs to evolve and roles to change.

“Amid these disruptions, few groups of workers will be at risk of displacement,” added Tay, who posted the results of the Institute of Banking and Finance Singapore poll of more than 1,000 financial practitioners.

The poll, conducted between June and July this year, showed that nearly 80% of workers in the industry were not fully aware of training opportunities now available.

This is despite the fact that 95% of practitioners were willing to invest in training and acquiring new skills, and 80% of them did feel that new technologies could drive efficiencies and make work easier.