DBS Bank is aiming to expand its small and medium-sized enterprise (SME) banking business beyond Singapore and Hong Kong this year.

Speaking at a media briefing on Friday, DBS' SME banking regional head, Mr Lim Chu Chong, said the bank now earns 20 per cent of its SME banking income from Taiwan, China, India and Indonesia but wants to increase this share to 30 per cent.

The lion's share - 80 per cent - of its SME banking income now comes from Singapore and Hong Kong.

There is "plenty of room to expand" in the markets beyond Singapore and Hong Kong, Mr Lim said, although they may be getting crowded.

DBS has "challenging competitors", but it aims to differentiate itself by offering more innovative solutions, he added.

He also warned that headwinds in Asian markets could affect SMEs' ability to pay off their loans this year.

Taiwanese SMEs recorded the highest rate of non-performing loans last year, followed by Indian SMEs. There may be a rise in such non-performing loans across the region, but not at significant rates, Mr Lim added.

SME banking is one of DBS' main priorities, he said.

It now contributes 15 per cent of DBS' total income. Last year, the SME banking unit raked in a record $1.37 billion in income last year, up 11 per cent from 2012.