UPDATE 1-Singapore's UOB says Q3 profit beats forecast

* Net profit S$500 mln; consensus S$463 mln

* CEO says worst of the economy is behind us

* Shares up 2 pct pre-results, underperformed rivals in 2009 (adds detail on outlook)

By Saeed Azhar

SINGAPORE, Oct 30 (Reuters) - United Overseas Bank (UOBH.SI) said on Friday it was ready to seize growth opportunities, as a recovery in the Singapore economy helped it post a better-than-expected 5.3 percent rise in quarterly profit.

UOB has been the most conservative among the three Singapore banks, shrinking its balance sheet and taking bigger loan losses than rival Oversea-Chinese Banking Corp (OCBC.SI), whose assets have grown to overtake UOB as city-state's second-biggest bank.

"Three months back, we indicated that 'maximum fear' is behind us. Now, it appears that the worst for the economy is behind us as well," UOB's CEO Wee Ee Cheong said in a statement.

"Beyond the crisis, we will continue to selectively seize growth opportunities and work towards achieving greater synergies across our regional network."

The outlook for Singapore banks, like their Asian peers, is improving with bad debts peaking for most banks due to a recovery in regional economies and strong capital markets boosting income from trading and fees.

"Things probably have reached the turning point," said an analyst who covers UOB, but who declined to be identified. "Asset quality has stabilised, NPLs have flattened and credit costs are stable and you can see some modest loan growth."

UOB posted a net profit of S$500 million in July-September, compared with S$475 million a year earlier.

Analysts had predicted a net profit of S$463 million, according to an average forecast from six analysts polled by Reuters.

UOB said bad debt charges increased to S$235 million, up 49 percent from a year earlier due to individual loan losses. However, bad debt charges declined from the second quarter by 49.5 percent.

OCBC (OCBC.SI) reported on Wednesday an unexpected 12 percent rise in quarterly profit, helped by lower bad debt charges and trading gains that overcame writedowns on toxic debt linked to its insurance unit.

DBS (DBSM.SI), Southeast Asia's biggest lender, will report on November 6.

UOB said net interest income rose 3.6 percent to S$925 million from a year earlier. Non-interest earnings, such as commissions and fees on investment products, grew 24 percent.

UOB's shares have underperformed its Singapore rivals this year, rising around 32 percent, below the benchmark Straits Times Index's .FTSTI that has risen about 50 percent. (Editing by Neil Chatterjee)