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Singapore Commercial Banking Report Q3 2007Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2007 Product Code: R302-1614 Description Key IssuesThis quarter we have updated a lot of the numeric information in the banking reports. We now have final banking statistics, sourced from the central bank/regulator or trade association, in relation to the end of 2006 for all countries other than Iran. All of the commercial banking reports need to be considered in the context of a global environment that was benign for banks in the vast majority of the 59 countries for which have collected data. In 2006 the median local currency growth in total assets was 17.2% (in Croatia). The median local currency growth in total loans was 18.2% (in Bangladesh). The median local currency growth in total deposits was 16.9% (in Algeria). In almost all countries local currencies were stable or rising relative to the US dollar. Except in Venezuela and Iran, figures were not distorted by double-digit inflation. Loan/deposit, loan/asset and Loan/GDP ratios all provide a rough measure of the development of the banking systems. Across the 59 countries for which we have collected data, the median loan/deposit ratio is 85.1% (in Thailand). The median loan/asset ratio is 54.8% (in Romania). The median loan/GDP ratio is 53.4% (in Kuwait). Across the eurozone, by comparison, the equivalent numbers are 126.4%, 50.6% and 119.3%. All three ratios are rising in most of the countries for which we have collected data. The global economy looks set to be less supportive in the year ahead, which will result in a deceleration in the pace of trade-dependent Singapore's economic growth. Nevertheless, strong GDP data for the first three months of 2007 points to the economy's resilience, leading to our year-end forecast to 5.8%, compared with the 7.9% growth rate achieved in 2006. Moderate inflation - a result of low housing costs and rebates from the government - has led the Monetary Authority of Singapore to maintain its policy of 'modest and gradual appreciation', when it convened in April. Figures for April show consumer price inflation rose by 0.6% y-o-y, slipping a seasonally adjusted 0.7% in March (but rising from 0.3% in January), suggesting that regional floods have so far had minimal impact on prices. Going forward however, the upcoming GST hike and a turnaround in property prices will add to inflationary pressures. As a result, we expect inflation to average 1.2% in 2007, compared with 0.9% in 2006. To stall this accelerating trend the central bank may elect to pursue a stronger appreciation bias in H207. The Singapore dollar experienced strong appreciation in 2006, gaining by 8.2%, on the back of the extremely impressive performance of the economy; real growth was expected to come in at 7.9% for the year. Inflationary pressures have all but dissipated. The business environment remains one of the most friendly in the world. Per-capita deposits are significantly lower in Singapore than in Hong Kong. Table of Contents
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