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DBS Group, Southeast Asia's biggest lender, posted an unexpected 8 percent rise in quarterly earnings as strong loans growth more than made up for subdued interest rates.
DBS has been capturing market share from rivals, in particular European banks that have stepped back from Asia due to the eurozone debt crisis. In the three months ended December, the Singapore lender chalked up loans growth of 28 percent.
Analysts, however, say earnings growth this year could prove to be difficult as a slowdown in Asian economies reins in loan growth, while interest rate margins remain hostage to low U.S. rates.
Hopes for higher rates in DBS' key markets — Singapore and Hong Kong — were dented after the Federal Reserve signaled that U.S. rates would probably remain at their current level near zero through late 2014.
"We are committed to pursuing growth in a judicious and disciplined manner while keeping a watchful eye on the health of the global economy " CEO Piyush Gupta, a former Citigroup executive who took over the top post more than two years ago, said in a statement.
The Singapore bank made a net profit of S$731 million ($586 million) for October-December period, up from S$678 million a year earlier.
That compared with an average forecast of S$672 million, according to six analysts surveyed by Reuters.
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