Auxiliary financial services expanded 5.0% as overall banking grew 4.4%, with resident loans up 6.1%.

Full-Year 2025 Lending Trends

Singapore's banking sector recorded total loan growth of 4.4% in 2025, driven by a sharp rebound in domestic credit intermediation and sustained momentum in non-resident lending, according to FPA Financial's February 2026 market review. The overall banking portfolio reached a record SGD 886.1 billion in December 2025, up from SGD 873.1 billion in November, as reported by TradingView based on Monetary Authority of Singapore (MAS) data.

Loans to residents rose 6.1% in 2025, the strongest segment of the sector. The recovery was led by a turnaround in lending to the manufacturing sector, although weaker loans to business services partially offset the gains. Consumer lending, including housing loans, also picked up during the year. Resident nonbank lending grew 6.8% year-on-year in the first nine months of 2025, according to the ASEAN+3 Macroeconomic Research Office (AMRO), following a 5.2% expansion in 2024 and a contraction of 2.4% in 2023.

December 2025 recorded the strongest monthly increase since December 2024, with business loans rising 2% month-on-month to SGD 538.7 billion and consumer loans increasing 0.8% to SGD 347.4 billion. The lower interest rate environment and easing U.S. tariff concerns in the second half of 2025 supported loan growth, per FPA Financial's analysis. The 3-month compounded Singapore Overnight Rate Average (SORA) declined during this period, correlating with the uptick in year-on-year growth for both consumer and business loans.

Growth (%) (%)Source: Orionmano Industries

Non-Resident Lending and the Americas Catalyst

External lending to non-residents increased 3.4% in 2025, supported by stronger lending to the Americas, FPA Financial reported. This segment contributed to the overall 4.4% expansion of the banking sector, though it lagged the domestic loan recovery.

The Americas lending growth reflects broader regional dynamics. AMRO noted in its December 2025 assessment that Singapore's business loan recovery became more broad-based around mid-2024, initially driven by an upturn in trade-related industries and improving business sentiment, particularly in property-related sectors. Growth momentum 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 U.S. tariff policies.

The macroeconomic environment supported external lending. After easing in 2024, financial conditions tightened in April 2025, per the IMF's 2025 Article IV Consultation, with domestic interest rates—including the 3-month compounded SORA—declining from 3.6% in August 2024 to 2.5% in April 2025, mostly in line with U.S. interest rates. The lower rate environment likely supported credit demand from Americas-based borrowers seeking Singapore-dollar-denominated loans or syndicated facilities arranged through Singapore banks.

Banking Sector Health and Broader Financial Services

Singapore's banking sector maintained strong resilience through 2025, supported by sound asset quality, robust capital buffers, ample liquidity, and solid profitability. The overall non-performing loan (NPL) ratio declined for the fifth consecutive quarter to 1.2% in Q2 2025, with all major segments registering lower NPL ratios than a year earlier, AMRO reported. The banking sector's capital adequacy ratio (CAR) stood at 18.2% and Tier 1 CAR at 16.7% in Q3 2025, well above minimum regulatory requirements. The IMF's Article IV Consultation recorded a CAR of 18.9% in Q1 2025, corroborating the sector's strong capitalization.

MAS's November 2025 Financial Stability Review confirmed that banks maintained healthy liquidity positions with stable loan-to-deposit (LTD) ratios. The banking system's total provisioning coverage increased to 137% as of Q2 2025, up from 113% in Q2 2024, reflecting adequate precautionary buffers against potential credit costs in an uncertain economic environment. Local banking groups' robust earnings underpinned their strong capital positions, with aggregate Common Equity Tier 1 (CET1) capital comfortably above requirements.

Beyond traditional lending, auxiliary financial services expanded 5.0% in 2025, led by payment players that benefited from higher regional spending. The fund management segment grew 5.1% for the year, as accommodative financial conditions and improving sentiment boosted net inflows. This diversification reflects the broadening of Singapore's financial services ecosystem beyond core banking activities.

Independent economist Song Seng Wun observed that growth in business loans remained consistent as Singapore's economy performed better than expected in 2025, per FPA Financial's report. However, analysts expect Singapore's economic growth to moderate in 2026, with projected Federal Funds Rate declines potentially supporting continued but more measured credit expansion.

Singapore's banking sector enters 2026 with strong capital and asset quality buffers, positioning it to absorb potential headwinds from global trade uncertainties while maintaining capacity for measured loan growth. The combination of easing U.S. tariff concerns and a lower interest rate trajectory should support credit demand, though the pace of expansion is expected to moderate from 2025 levels.