Chart of the Day: Singapore banks' loan growth is recovering

Loan growth is expected to hit 6-7% for 2017-2018.

Against the backdrop of improved economic and trade activity in Singapore and in the region, Moody's Investor Service expects loan growth for 2017-2018 to be moderately higher, at around 6-7%, compared to very muted growth in 2016, with a key driver being foreign loans.

"Aside from reflecting a recovery in trade activities, this is also the result of a multiyear effort by Singapore banks to diversify further into regional operations, particularly in Greater China, the ASEAN region and other Asian economies. Domestic and foreign loans made up respectively 48% and 52% of gross loans at end-2016 for the three large banks. Domestic corporate loans and household loans accounted for 59% and 41%, respectively, of domestic loans."