Singapore banks not out of the woods yet

SINGAPORE (Jan 4): Maybank Kim Eng has reiterated its “negative” rating on the Singapore banking sector as November’s banking system data proved to be “uninspiring”.

System loan growth saw its 11th consecutive quarter of contraction, declining 1.2% during the month. It was an improvement over the 2.2% decline in Oct, as lending improved in most sectors. Corporate loan growth declined by 1.9% and consumer loan growth grew by a mere 0.7%.

Maybank’s analyst Ng Li Hiang has forecast a 1% to 2% loan growth for FY17 on the back of the “lacklustre lending environment” and the banks’ possible reluctance to lend to new customers.

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