SINGAPORE - DBS Group, Southeast Asia's biggest bank, said it was well positioned to take advantage of an emerging economic recovery after reporting a 49 per cent jump in third-quarter profit, fuelled by higher interest margins and lower bad debt charges.

Singapore banks rode the financial crisis in better shape than their global peers and earnings are poised to improve next year as a recovery in Asian economic growth boosts loan demand and fees improve from rising capital market deals.

Bad debts are also peaking as Asian economies averted the worst of the credit crisis that piled up huge losses for Western banks in the United States and Europe.

"Our net interest income is at a quarterly record and fee income is at its highest level since the onset of the global financial crisis," DBS Chairman Koh Boon Hwee said in a statement.

"I believe DBS is well positioned to take advantage of the nascent economic recovery - we will emerge fitter and stronger."

DBS said on Friday its July-September net profit was S$563 million, compared with S$379 million year ago. Analysts had predicted a net profit of S$480 million, according to an average of six forecasts in a Reuters survey.

Analysts were expecting a strong result from DBS after rivals United Overseas Bank and Oversea-Chinese Banking Corp announced better-than-expected results last week.

Bad debt charges fell to S$265 million, down 17 per cent from a year earlier.

The bank, which is 28-per cent owned by state investor Temasek, saw loan growth of 1 per cent in the third quarter from the year-ago period.

DBS said quarterly net interest income rose 6 per cent to S$1.1 billion from a year ago as net interest margins rose to 2.03 per cent from 1.99 per cent, and fee and commission income climbed by 14 per cent.

The company declared an unchanged dividend from the previous quarter of 14 cents a share.

Shares of DBS have outperformed the benchmark stock index this year, gaining more than UOB, but on a par with OCBC. DBS shares are up about 54 per cent this year against a 49 per cent rise in the benchmark Straits Times Index.