Banks will continue to anchor relationship-based senior lending, KPMG said.
Private credit has not displaced bank lending but has instead helped lessen risk in the banking industry, according to KPMG.
Risk has been reallocated to private credit as banks optimised their balance sheet or capital efficiency, the accountancy firm said in the July 2026 report on private credit in Singapore.
“In Singapore, private credit has not displaced bank lending; it has provided an alternative and absorbed risk that banks are less willing to hold, improving capital efficiency across the system,” KPMG said.
Banks will continue to anchor relationship-based senior lending, transaction banking and working capital, as well as regulated, balance sheet efficient exposures, KPMG said.
Meanwhile, private credit has expanded to bespoke and structured financings, higher-leverage or transitional risk, and special situations and stressed capital, amongst others.
Private credit is increasingly inheriting earlier cycle risk, covenant governance complexity, and workout responsibility.
“In practice, this has pushed private credit from a supplementary financing role into a system-relevant role, where outcomes are defined less by access to capital and more by the ability to govern through transition or stress,” KPMG said.
Read More: Singapore banks offload risk to private credit
