This is the fastest rate of expansion since October 2018.
Singapore bank loans expanded by 3.5% year-on-year (YoY) in June, the highest since October 2018, amidst optimism in the market, OCBC Treasury Research reported.
This was driven not only by the low base last year, but also by more buoyant economic sentiments.
Business loan growths finally reverted to positive territory at 2.6%, driven by a 12.8% growth in loan demand in general commerce and 1.2% loan demand from financial institutions.
Consumer loans have been expanding since February amidst a buoyant mortgage loan market, which expanded 3.4% year-on-year, and credit demand for cards, credit card spending, and share financing.
“This suggested that despite the dampening effects of tighter restrictions during the Phase 2 (Heightened Alert) period in mid-May to mid-June, the Spore economy was generally in better shape when compared to the stricter Circuit Breaker restrictions,” said OCBC Treasury Research Head of Research and Strategy Selena Ling.
Month-on-month, June bank loans expanded by 1.5%, marking the eighth straight month of bank loan expansion.
“Bank loans growth accelerated to 1.7% YoY in 2Q21, bringing the first half of the year to 0.5% YoY. Our full-year bank loans growth forecast remains at 1.5% YoY given the relatively low base in the second half of 2020,” said Ling.