A SHORTER month and a more cautious outlook among businesses and consumers led to a sharply slower pace of growth in bank lending in February.

Overall bank loans - to both the consumer and business segments - came in at $584.5 billion, based on preliminary data from the Monetary Authority of Singapore yesterday.

The amount rose by 0.4 per cent from January but is much lower than the 1.4 per cent hike registered in January from December.

A key reason for the slowing growth in loans - it was the third straight month that the pace of expansion has moderated - was the quantum of loans to businesses.

Business loans for February stood at $358.1 billion, up by 0.5 per cent in February from January.

This was much lower than the 2.1 per cent growth logged in January from December.

Loans to the building industry, general commerce operations and the transport, storage and communication sectors all fell in February.

This was in stark contrast to January, when loans to all business segments except agriculture went up.

Analysts said the building sector took a hit due to the cooling property market, while the general commerce and transport industries were probably affected by the slowing Chinese economy.

OCBC economist Selena Ling noted that February is a short month and that lending was likely to have been affected by businesses shuttering during Chinese New Year.

"Singapore's economy is expected to grow between 3 and 4 per cent this year, we're not going to get a sharp V-shaped bounce," Ms Ling said.

"A lot of that is tied to the United States Federal Reserve rate hike to come next year and uncertainty over China - that's likely some cause for caution on the business loans side."

Consumer loans also did not provide much support, with $226.4 billion disbursed in February.

This was up 0.3 per cent compared with January but down from the 0.4 per cent increase in January from December.

Housing loans in February went up 0.5 per cent from January to $168.2 billion, unchanged from the 0.5 per cent month-on-month hike in January.

Ms Ling said that compared with the same month a year ago, February's housing loan growth was 8.4 per cent higher, the slowest expansion since July 2007.

"The macro-prudential measures have been very effective in curbing the domestic property market," she added.

UOB economist Francis Tan said: "In housing, the effects of the total debt servicing ratio continue to filter down to weigh on loans."

Car loans continued their slide, with $10.3 billion lent, a 1.9 per cent decline from the previous month.

It was the 19th consecutive month of decline for car loans as buyers were hit by tighter financing requirements and higher prices for the certificates of entitlement.

"The car financing measures continued to bite and, on a year-on-year basis, the 17 per cent decline is the worst I have seen since 2005," Mr Tan said.