Chart of the Day: Loan pace turns sluggish

Loan growth in Singapore banks is projected at 12% for 2012.

DBS Group Research said:

1Q12 bank results reaffirmed the slower loan pace.

Overall, S$ corporate loans drove growth. Banks continued to guide for low-teens loan growth in 2012. It is no surprise that loan growth momentum will continue to moderate for the rest of the year.

However, we believe the Singapore banks remain well positioned to take advantage of extended credits given their liquidity position, similar to what we saw in the past when they benefitted from the pull-back of credits by the European banks.

This would also provide Singapore banks an opportunity to price up loan spreads in view of a tighter supply market.

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