Quarterly figures for DBS, southeast Asia's largest lender, showed a 16 per cent year-on-year jump in profits.

DBS, Southeast Asia’s biggest lender, posted a 16 per cent rise in net profit to a record S$933 million ($751 million) in the three months to March 2012 from a year ago, bolstered by customer lending.

Net interest margins increased four basis points to 1.77 per cent from higher loan yields. Loans rose 3 per cent (excluding currency translation effects) to S$198 billion, with Singapore-dollar loans leading the increase.

Total income crossed S$2 billion for the first time “underpinned by sustained loan growth, broad-based non-interest income, as well as higher contributions from all our markets,” said DBS chief executive Piyush Gupta, in a statement.

Net interest income increased 4 per cent from the previous quarter to a record S$1.34 billion, albeit with slower growth than in previous quarters. Deposits grew 4 per cent (excluding currency effects) to S$232 billion, mainly from US dollar, Hong Kong dollar and Singapore dollar deposits. DBS said its liquidity remained healthy, with the loan-deposit ratio easing to 85 per cent.

Non-interest income increased 31 per cent from the previous quarter to a new high of S$820 million. Fee income rose 19 per cent to S$406 million from higher contributions across a wide range of businesses led by wealth management, lending, stockbroking and trade and remittances.

Trading income more than doubled to S$292 million from higher customer flows and more favourable market conditions, said the Singapore-based lender.

Total income of S$2.16 billion was 13 per cent higher than the previous quarter. Expenses were little changed at S$898 million, as higher staff costs were offset by lower technology and other costs. The cost-income ratio was much lower than peers, at 42 per cent. Analysts at the Scorpio Partnership consultancy say Asian bank cost/income ratios are the highest in the world, averaging around 80 per cent.