THE FINANCIAL SECTOR:
PERFORMANCE AND GROWTH
     
Content Page
Modest Recovery in 2003
Financial Market Activity
 
FINANCIAL MARKET ACTIVITY
 
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Rise in Asian Dollar Market Lending . Box 12 – A Robust Financial System
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Healthy Growth in Corporate Debt Market . Active Trading in Equities and Futures Market
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Vibrant Treasury Market . Box 13 – The Singapore IPO Market
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Mixed Performance for Insurance . Box 14 – Bank Loans to HDB Flat Buyers
 
Lending in the Domestic Market
 
Total assets of the commercial banks rose 2.7% to S$362.5 billion in 2003. Commercial bank lending was robust, supported by household lending, particularly mortgages. Housing loans were boosted by bank-originated Housing & Development Board (HDB) loans which accounted for S$4.5 billion of loans in 2003. S$2.9 billion were new bank loans and S$1.6 billion were due to refinancing (See Box 14). Commercial bank lending to non-bank customers rose to S$171.4 billion at end last year, an increase of S$10.2 billion over the year. Household lending accounted for S$52.4 billion
of total non-bank lending. Part of the increase was due to the integration of the loan portfolios of two finance companies, Overseas Union Trust and OCBC Finance with the banking sector during the year.

As lending among resident banks increased S$3.9 billion, loans to banks outside Singapore1 declined S$3.2 billion, resulting in a modest S$730.5 million rise in overall interbank loans in 2003. This decline in loans to banks outside Singapore was consistent with the greater allocation of funds to non-bank lending which picked up in 2003.
 
Deposits of non-bank customers grew a respectable 7.8% in 2003, compared to the mild 1.3% contraction in 2002. Deposits rose to S$194.2 billion, a S$14.1 billion increase from 2002, part of which was attributed to the integration of Overseas Union Trust and OCBC Finance with the banking sector. Fixed deposits increased S$7.7 billion during the year, while savings deposits grew S$3.6 billion.