Nonresident lending hit a 3.4% annual increase, driven by Americas credit extension, as overall banking conditions remained stable.

Nonresident Loan Growth Accelerates in 2025

Loans to non-residents in Singapore increased 3.4% in 2025, reversing the contraction recorded in prior years and underscoring the city-state's continued relevance as a hub for cross-border credit intermediation. The growth, confirmed by the Monetary Authority of Singapore (MAS), reflects measured but positive demand from overseas borrowers, even as domestic credit expansion outpaced it by a wide margin.

Resident nonbank lending grew 6.8% year-on-year in the first nine months of 2025, more than double the nonresident pace, according to data from the ASEAN+3 Macroeconomic Research Office (AMRO). That acceleration followed a 5.2% expansion in 2024 after a 2.4% contraction the year prior. The divergence points to a banking system where local and trade-related demand—rather than offshore borrowing—is the primary engine of credit growth.

Total bank lending to Singapore’s private sector reached S$902.3 billion in March 2026, a new all-time high and up from S$893.6 billion in February 2026, per MAS figures cited by Trading Economics. The sustained upward trajectory in aggregate lending volumes, combined with the pick-up in nonresident loans, suggests broad-based credit demand amid accommodative financial conditions.

Annual Growth (%) (%)Source: Orionmano Industries

Americas Lending Drives Nonresident Expansion

The 3.4% uptick in nonresident loans was not uniform across geographies. MAS reported that lending to the Americas constituted the primary contributor to nonresident loan growth in 2025. While the regulator did not break out the exact share attributable to the region, the directional shift is notable after years in which Asian and European exposures dominated Singapore's cross-border lending book.

The geographic tilt toward the Americas likely reflects corporate borrowing by entities headquartered or operating in North and South America that access Singapore’s deep dollar liquidity pools and stable regulatory environment. Singapore’s banks have long served as a funding conduit for multinational corporations with regional treasury operations, and the Americas contribution suggests that conduit remains active even as global interest rate cycles diverge.

By contrast, resident credit expansion was predominantly trade-linked. AMRO noted that the recovery in domestic business loans was "initially driven mostly by an upturn in trade-related industries" and became more broad-based around mid-2024. By early 2025, trade lending in particular was "buoyed by front-loading of exports and strong global demand for electronics linked to AI-related products," according to the MAS Financial Stability Review. The electronics export surge created a tailwind for working capital and trade finance facilities booked with Singaporean banks.

The MAS Review also highlighted a significant easing in domestic monetary conditions. The 3-month Singapore Overnight Rate Average (SORA) fell from 3.59% in Q3 2024 to 1.72% in Q3 2025, a decline of 187 basis points. Lower benchmark rates reduced borrowing costs for both residents and nonresidents, providing additional support for credit demand across segments.

Broad Banking Conditions Remain Benign

The loan growth observed in 2025 occurred in a banking environment characterized by low risk, strong capitalisation, and improving asset quality. MAS reported stable banking conditions with low leverage for residents and nonresidents alike. System-wide vulnerabilities remained contained, with banks maintaining healthy liquidity positions and stable loan-to-deposit ratios.

Asset quality metrics continued to improve. The overall non-performing loan (NPL) ratio declined for a fifth consecutive quarter to 1.2% in Q2 2025, with all major loan segments registering lower NPL ratios year-on-year, according to AMRO. The steady compression in problem loans reflects both the benign macro environment and conservative underwriting standards that have characterised Singaporean banks since the global financial crisis.

Capital buffers remained ample. As of Q3 2025, the banking sector’s capital adequacy ratio (CAR) stood at 18.2%, with Tier 1 CAR at 16.7%. Both ratios are well above the regulatory minima and afford banks substantial headroom to absorb potential shocks. The strong capital position, combined with diversified income streams, has positioned lenders to withstand any adverse impacts from declining interest rates on net interest margins.

Broader financial conditions were supportive. MAS noted that "overall banking FVI level remaining benign," with liquidity and maturity risks staying low throughout 2025. The favourable backdrop helps explain why credit has continued to expand even as global trade policy uncertainty persists.

Outlook

Nonresident lending is expected to continue benefiting from Singapore’s stable banking infrastructure and global credit demand for the foreseeable future. The city-state’s status as an International Financial Centre, with robust legal frameworks and deep foreign exchange and capital markets, provides a structural advantage in attracting cross-border loan bookings.

However, tariff uncertainties and trade policy shifts—particularly those emanating from the United States—may temper growth in trade-linked segments that have driven much of the resident credit expansion. AMRO observed that the momentum of business loans "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." Similar volatility could affect nonresident lending if trade flows become disrupted or if corporates reassess their regional funding strategies.

Lower interest rates should continue to support credit demand in the near term, but the pace of nonresident loan growth may moderate if global economic conditions weaken. For now, the trajectory remains positive, supported by a banking sector that enters 2026 with low NPLs, high capital, and a tested capacity to intermediate cross-border credit.