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BANK lending here dipped again last month after a slight increase in March, as loans to businesses shrank for the sixth straight month and lending to the building and construction sector stalled.
Total Singapore-dollar bank loans at end-April stood at $270 billion, down 0.3 per cent from a month earlier, estimates from the Monetary Authority of Singapore show.
In March, bank lending rose 0.1 per cent to $270.7 billion, after declining for four straight months from a peak of $275.9 billion at the end of October last year.
Loans to businesses fell 1.1 per cent in April to $154 billion, the sixth consecutive monthly decline. Over the half-year to end-April, loans to businesses contracted by $92.3 billion, or some 5.7 per cent, based on the latest data.
As the recession wears on, both credit supply and demand have waned as banks tighten lending standards, some businesses go bust, and others postpone spending plans until the economy recovers.
In the first four months of this year, 54 petitions to liquidate companies were filed with the Insolvency and Public Trustee's Office, compared to 48 for the same period last year. 40 companies have been forcibly wound up from January to April, compared to 48 a year earlier.
These figures do not include firms that may voluntarily choose to wind up if they can repay their debts in full, but do not believe that their business can be sustained.
Loans to the building and construction sector - the biggest business-loan segment by far - dipped 0.1 per cent to $50.8 billion, reversing a 1.4 per cent climb in March. That value has been hovering around $50 billion since November, suggesting that growth in lending to the sector may have stalled.
Song Seng Wun, senior economist and head of research at CIMB, said that as property developers continue to draw down loans on existing projects in the months ahead, the amount of outstanding loans to the sector will still grow, 'but the rate of growth will definitely slow'.
Lending to the manufacturing sector dipped 3.1 per cent over the month to $11.5 billion.
'This is certainly consistent with a slowing in economic activity,' Mr Song said.
Over the year to end-April, total bank lending rose 7.6 per cent - down from 8.6 per cent growth over the 12 months to March 31, and the slowest yearly pace of growth since January 2007.
Unlike loans to businesses, consumer lending continued to grow. Total consumer loans rose 0.8 per cent in April to $116 billion at the end of the month. That included $81 billion worth of housing and bridging loans, which grew 0.6 per cent over the month.
One particularly bright spot was share financing, which rose 7.8 per cent over April to $594.7 million, as investors attracted by the recent stock market rally borrowed more to buy shares. Car loans slid 0.4 per cent - the third monthly decline since February - to $12.4 billion.
Banks also wrote off $15 million in credit-card bad debt in April, the most since December 2004, though the number of credit cards in circulation has risen by 39 per cent since then, to some 6.4 million cards.
'This is the result of the last year or so of slower economic growth,' Mr Song said. 'When banks write off the debt, it's usually after several months of attempts to get people to pay up.'
'I suspect it will continue to climb' as more people find it harder to pay their bills, he said.
So far, however, the data suggests that consumers are still paying the bulk of their credit-card debts on time, instead of rolling it over to the next month.
The average rollover balance per card at end-April was $538.20, slightly higher than a month earlier, but far below the levels of more than $700 seen from November 2001 to February 2004, after the recession that followed the bursting of the technology bubble.
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