Singapore banks' loan growth to hit 6% in FY17

System loan growth moderated to 0.4% in May.

Maybank Kim Eng reported that system loan growth in May moderated to +0.4% MoM/+5.1% YoY (Apr: +1% MoM/+6.4% YoY), in line with their expectation.

"Our loan growth assumption for Singapore banks is +6% YoY for FY17, as banks stand to benefit from the recovery in the domestic economy. We see upside risk to our assumption if the momentum is sustained," noted Maybank Kim Eng.

"We think it is feasible for Singapore banks to reach their guidance of mid-single digit loan growth for FY17. As at 1Q17, the banks’ loan growth in Singapore (as a proxy) was between 6-8%, slightly higher than the system’s," the firm added.