Chief executive David Conner said on Wednesday that the bank had intentionally avoided selling complex credit-linked notes to retail customers of the bank.

'We did not create some of these products, we did not sell them. There was intent with that and we avoided them on purpose,' said Mr Conner, who was referring to structured products like DBS High Notes and Minibonds linked to the now-bankrupt Lehman Brothers.

Mr Conner, speaking at the release of the bank's third-quarter results, said OCBC distributed products like Minibonds only through its brokerage arm.

'A securities brokerage business is very different from that of a bank,' he added. 'At a bank, we look at people's savings and time deposits, and we suggest to them that they might look at other investments that give different risk-return characteristics.'

By contrast, customers of its brokerage 'tend to buy and sell a fair bit and they see losses in their portfolios in equities so they are a different kind of customer from a typical bank saver'.

Mr Conner also said he anticipated changes to how structured products will be sold after the debacle that has ensnared some financial institutions here.

'I think that some of these products may not be allowed to be sold to lower-level customers, the mid-worth customer and less sophisticated customer.'

But the bank's results suggested that OCBC had found some rough water of its own. Bad debts accumulated amid the volatile global financial markets dealt a far nastier blow to its third-quarter profits than analysts had tipped.

Earnings fell 13 per cent to $402 million for the three months to Sept 30, down from $463 million a year ago.

'The global financial crisis has carried us into uncharted territory over the past few months and is unprecedented in its scale and impact,' Mr Conner said.

Four analysts polled by Reuters had tipped net profits of $417 million.

Net profit for the nine months was down 12 per cent to $1.44 billion.

Net allowances made for the quarter also rocketed to $156 million - a staggering $117 million more than last year, mainly on losses from debt securities blamed on 'unprecedented upheavals in the global credit markets'.

CIMB-GK analyst Kenneth Ng said: 'Generally, the whole market is expecting rising provisions, just that it was not expected to rise so fast.

'But to be fair, a lot of the $156 million were not loan-related provisions, instead they were provisions made for investment-related general allowances related to debt securities.

'For loan-related provisions, what you are seeing is the non-performing loan ratios are still low, quarter-on-quarter.'

Healthy loan growth and stronger interest margins drove net interest income - what it earns from borrowers above interest paid to depositors - up 21 per cent to $684 million.

Loans, mainly to corporate and SME clients, rose 20 per cent from last year and 4 per cent from the previous quarter.

Non-interest income took a dip, falling 4 per cent to $462 million. That decline was largely offset by insurance income, which grew to $177 million from $123 million.

OCBC's non-performing loan ratio remained at just 1.3 per cent as at Sept 30. The bank's earnings per share fell from 53.4 cents to 48.8 cents while net asset value per share dropped from $4.72 to $4.47 for the quarter.

Mr Conner expects the next few quarters to be 'challenging for individuals and businesses around the world' but said that 'given OCBC's strong capital, funding and liquidity position, as well as our ongoing profitability, we are well placed to deal with (them) and to take advantage of emerging opportunities'.

OCBC shares rose 21 cents to $5.28 after the results were announced.