DBS Group Holdings, Southeast Asia’s biggest bank, reported third-quarter profit that beat analysts’ estimates as loan growth outweighed narrowing interest margins.

Net income climbed 28% to a record $722 million in the three months ended Sept. 30, from $563 million a year earlier, the Singapore-based company said in a statement today. That beat the $655.3 million average of nine estimates compiled by Bloomberg.

DBS, led by Chief Executive Officer Piyush Gupta, is benefiting from a revival in credit growth as Asia’s economic expansion outpaces the rest of the world. That has spurred profit even as income from lending is crimped by low borrowing costs in Singapore and Hong Kong.

“Stronger loan momentum, and evidence that some fee-related initiatives are beginning to bear fruit” makes DBS a preferred pick, Robert Kong, a Singapore-based analyst at Citigroup Inc., wrote in a report on Oct 22.

Net interest income, or the difference between what the bank makes from lending and pays on deposits, rose 1% from the previous quarter to $1.1 billion. Loans rose 1%, spurred by corporate borrowing across Asia as well as home loans in Singapore. The net interest margin, a measure of loan profitability, declined four basis points to 1.8%.

Total loans in Singapore rose 12.1% from a year earlier to $309.4 billion in September, data from the Monetary Authority of Singapore show.

Non-interest income fell 2% from the previous quarter to $730 million, dragged down by a drop in loan-related fees, DBS said. Investment banking revenue rose, while trading income growth slowed, the statement said.