UPDATE 1-DBS says Q3 net profit surges 49 pct, eyes growth

* Q3 net profit S$563 mln; consensus S$480 mln

* Bad debt charges fall 17 pct

* Q3 net interest income up 6 pct, fee income up 14 pct

* Says well positioned to take advantage of recovery

* Shares up 54 pct in 2009, outperformed market (adds details on earnings, quote)

SINGAPORE, Nov 6 (Reuters) - DBS Group (DBSM.SI), Southeast Asia's biggest bank, said it was well positioned to take advantage of an emerging economic recovery after reporting a 49 percent jump in third-quarter profit, fuelled by higher interest margins and lower bad debt charges.

Singapore banks rode the financial crisis in better shape than their global peers and earnings are poised to improve next year as a recovery in Asian economic growth boosts loan demand and fees improve from rising capital market deals.

Bad debts are also peaking as Asian economies averted the worst of the credit crisis that piled up huge losses for Western banks in the United States and Europe.

"Our net interest income is at a quarterly record and fee income is at its highest level since the onset of the global financial crisis," DBS Chairman Koh Boon Hwee said in a statement.

"I believe DBS is well positioned to take advantage of the nascent economic recovery -- we will emerge fitter and stronger."

DBS said on Friday its July-September net profit was S$563 million ($404 million), compared with S$379 million year ago. Analysts had predicted a net profit of S$480 million, according to an average of six forecasts in a Reuters survey.

Analysts were expecting a strong result from DBS after rivals United Overseas Bank (UOBH.SI) and Oversea-Chinese Banking Corp (OCBC.SI) announced better-than-expected last week this week.

Bad debt charges fell to S$265 million, down 17 percent from a year earlier.

The bank, which is 28-percent owned by state investor Temasek [TEM.UL], saw loan growth of 1 percent in the third quarter from the year-ago period.

DBS said quarterly net interest income rose 6 percent to S$1.1 billion from a year ago as net interest margins rose to 2.03 percent from 1.99 percent, and fee and commission income climbed by 14 percent.

The company declared an unchanged dividend from the previous quarter of 14 cents a share.

Shares of DBS have outperformed the benchmark stock index this year, gaining more than UOB, but on a par with OCBC.

DBS shares are up about 54 percent this year against a 49 percent rise in the benchmark Straits Times Index .FTSTI. (Reporting by Saeed Azhar; Editing by Valerie Lee and Neil Chatterjee )