By P.R. Venkat

DBS Group Holdings Ltd.'s third-quarter net profit fell 20% on year as the bank set aside a greater portion of allowances anticipating risks from the Covid-19 pandemic.

Net profit for the quarter ended September was 1.30 billion Singapore dollars (US$957.64 million), one of Southeast Asia's largest banks by assets said Thursday.

Total income was down 6% on year at S$3.58 as the net interest income and income from fees and commissions fell.

During the third quarter, the lender set aside S$554 million towards allowances, thereby taking such provisioning to S$2.49 billion for the nine-month period.

Banks across the world have set aside billions of dollars toward provisioning or credit allowances anticipating the impact of the Covid-19 pandemic on economies and businesses.

In line with the central bank's guidance asking local banks to moderate their dividend payout, DBS said it will pay 18 Singapore cents as dividends in the third quarter.

The bank said that on a quarter-on-quarter basis it was seeing an uptick in business with fee income rebounding to pre-Covid levels.

"The third quarter's results reflect a recovery in business momentum as regional economies emerge from lockdowns. The rebound in fee income to pre-Covid levels has enabled us to cushion the full impact of lower interest rates," said DBS Chief Executive Piyush Gupta.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

11-04-20 1809ET