Singapore Banking 2025 Loan Growth: Banking grew 4.4% in 2025 as loans to residents rose 6.1%, driven by a turnaround in manufacturing lending and pickup in
By Lucia Ferrari·April 4, 2026·5 min readOrionmano Industries
Singapore’s banking sector expanded 4.4% in 2025, with resident loan growth accelerating to 6.1% as a recovery in manufacturing lending and a sustained pickup in consumer loans — particularly housing — reshaped the credit landscape.
Total banking system loans in Singapore grew 4.4% in calendar year 2025, but the headline figure masks a sharp divergence between resident and non-resident lending. Loans to non-bank residents — the core domestic credit engine — expanded 6.1% for the full year, according to data from the Monetary Authority of Singapore (MAS) cited in the ASEAN+3 Macroeconomic Research Office’s (AMRO) December 2025 Annual Consultation Report. This follows a 5.2% expansion in 2024 and a 2.4% contraction in 2023, marking a clear two-year recovery cycle.
The resident lending recovery gained momentum through the year. In the first nine months of 2025, resident non-bank lending grew 6.8% year-on-year, accelerating from the 5.2% full-year pace in 2024. By March 2026, CEIC data showed total loan growth reaching 6.24% year-on-year, suggesting the trend carried into early 2026.
Manufacturing Lending Turnaround
The most notable swing in composition came from manufacturing lending. After years of contraction or flat growth, business loans to the manufacturing sector turned positive in 2025. AMRO’s analysis indicates that the recovery in business loans was initially driven by trade-related industries, but became more broad-based around mid-2024 amid improving business sentiment, particularly in property-related industries. By 2025, manufacturing lending had joined the recovery, supported by strong global demand for electronics linked to AI-related products, per the MAS Financial Stability Review (FSR) 2025.
The FSR notes that “resident credit growth has been underpinned by lending to the trade-related sectors, which were in turn buoyed by front-loading of exports and strong global demand for electronics linked to AI-related products.” This electronics-led manufacturing recovery provided a direct tailwind to bank lending.
Consumer Lending Reaches Five-Year High
Consumer loans emerged as the leading driver of overall loan growth in 2025. Maybank Research, in a June 2025 analysis, reported that consumer loans soared to a five-year high, rising 4.7% year-on-year, far outpacing business loans at 2.9% year-on-year. Housing loans — comprising approximately 19% of total loans — grew 3.6% year-on-year to SGD 245 billion, the fastest clip since July 2022.
AMRO’s data corroborates this trend: “Household loans climbed steadily, underpinned by a strong demand for housing and bridging loans, partly due to lower interest rates.” The 3-month SORA declined sharply from 3.59% in Q3 2024 to 1.72% in Q3 2025, according to the MAS FSR, providing direct support to mortgage demand.
The following chart illustrates the divergent loan growth rates across key segments in 2025:
Exhibit
Singapore Loan Growth by Segment, 2025 (% YoY)
Consumer lending outpaced business loans; housing led within consumer
The growth trajectory was not uniform across 2025. Loan momentum softened around mid-year as tariff-related uncertainty weighed on business sentiment. AMRO notes that “the growth momentum of business loans peaked at the turn of the year, softened through April 2025 and then picked up again, largely driven by swings in lending to trade-related industries amid uncertainty around the U.S. President’s tariff policies.”
Maybank Research’s analysis, dated June 2025, captured this deceleration: total loan expansion slowed to 3.4% year-on-year in April 2025, the lowest pace recorded that year after peaking at 4.2% in March. However, this appears to have been a temporary soft patch. By Q3 2025, MAS data shows resident non-bank lending expanded 6.8% year-on-year in the first nine months, and CEIC’s March 2026 reading of 6.24% suggests the recovery regained traction.
Deposits and System Resilience
Deposit growth remained robust through the period, supporting the lending expansion. CEIC data shows total deposits grew 11.8% year-on-year as of March 2026, indicating strong liquidity in the system. The banking sector’s non-performing loan (NPL) ratio declined for a fifth consecutive quarter to 1.2% in Q2 2025, per AMRO, with all major segments registering lower NPL ratios than a year earlier.
Capital adequacy remains well above regulatory minima: the capital adequacy ratio stood at 18.2% and Tier 1 CAR at 16.7% in Q3 2025. The MAS FSR confirms that “leverage vulnerabilities for both residents and non-residents are low amid strong capital buffers.”
Outlook into 2026
Bank management teams are guiding for low to mid-single-digit loan growth in 2026, according to a POEMS research note citing bank guidance. The same source notes that Singapore loan growth continued climbing at 6.1% as of January 2026, suggesting the year started on a strong footing. Net interest margin compression should begin to ease in FY2026 as deposit rate cuts flow through and interest rates stabilise.
Risks to the outlook include further tariff escalation, potential cooling measures in the property market, and the lagged impact of higher rates on household debt service. The HDB resale price index rose just 1.5% in Q1 2025, the lowest in five quarters, and further price moderation could reduce transaction volumes and mortgage demand.
Nonetheless, the core drivers that powered 2025 — a manufacturing rebound tied to AI-related electronics demand, lower interest rates supporting housing loans, and robust deposit growth — remain in place. Singapore’s banking system enters 2026 with strong asset quality, ample capital, and a credit growth trajectory that, while moderating from 2025 peaks, remains above pre-pandemic averages.
