DBS Group (DBSM.SI), Southeast Asia’s biggest bank, posted a surprise quarterly loss after it took a $1.02 billion goodwill charge for its Hong Kong operations.

DBS Group (DBSM.SI), Southeast Asia’s biggest bank, said, however, that the outlook remained healthy.

“Notwithstanding the goodwill impairment, we remain structurally bullish on prospects for Hong Kong and China, which are integral to the Asia growth story,” CEO Piyush Gupta said in a statement.

Singapore banks have survived the financial crisis in good shape, but are struggling to take full advantage of fast loan-growth and reduced loan-losses this year due to historically low rates.

DBS said net interest income fell almost 4% to $1.07 billion, although loans in the second quarter expanded 14% from a year ago. Net interest margins declined 17 basis points from a year ago.

DBS CEO Gupta is under pressure from investors not only to deliver strong earnings, but also expand the bank’s footprint beyond its core Singapore and Hong Kong market.

But with money market rates languishing near record lows, DBS is more vulnerable than its rivals due to its dominant position in the interbank market.

DBS said on Friday its April-June net profit was $718 million if the goodwill impairment was excluded, which was an improvement of 30% versus $552 million a year ago.

Analysts had predicted a net profit of $564 million, according to the average of eight forecasts in a Reuters survey.

DBS shares have fallen about 6% so far this year while Oversea-Chinese Banking Corp (OCBC.SI) is down 0.9% and United Overseas Bank (UOBH.SI) is up 0.9% The benchmark Singapore index is up 3.1%.