A suicide bombing killed three people and wounded 12 others on Thursday in the Afghan city of Kandahar, a provincial official said, in an attack Taliban authorities said was carried out by the Islamic State group.

There was no immediate claim of responsibility but the interior ministry said a "preliminary report shows that this crime has been carried out by Daesh", using another name for the jihadist group.

"The investigations are ongoing," interior ministry spokesman Abdul Mateen Qani told AFP. "As soon as possible the criminals will be identified... and punished for their actions."

Afghanistan's capital is Kabul but Supreme Leader Hibatullah Akhundzada lives in Kandahar city, in the southern province of the same name that is the birthplace of the Taliban movement.

The explosion at around 8:00 am (0330 GMT) targeted a group of people waiting outside the New Kabul Bank branch in central Kandahar city, said Inamullah Samangani, director of information and culture of Kandahar province.

"A suicide attack occurred in which three compatriots were killed and 12 others were wounded," he told AFP.

"Commonly our compatriots gather there to collect their salaries," he said, adding that the "victims were civilians".

Taliban authorities had surrounded the area outside the bank and did not let journalists close to the site.

However, an AFP journalist saw what appeared to be unconscious people or dead bodies being loaded into ambulances in the wake of the blast.

Firefighters and security personnel were clearing the area, where blood, scraps of clothes and shoes littered the ground.

Hospitals did not respond to requests for information, saying they had been told not to speak to the media.

Samangani said "the situation is under control" at one of the city's hospitals where the wounded were transported, denying there was an urgent need for blood donations as had circulated on social media.

"There is no such issue, and the wounded people are not in serious condition, they have superficial injuries," he said in a message to journalists.

The number of bomb blasts and suicide attacks in Afghanistan has markedly declined since the Taliban ended their insurgency after seizing power in August 2021, ousting the US-backed government.

However, a number of armed groups -- including the regional chapter of IS -- remain a threat.

Multiple explosions have been reported around Afghanistan since the start of the Muslim holy month of Ramadan on March 11, but few have been confirmed by Taliban officials.

The regional chapter of IS has a history of targeting Shiites they consider heretics but is also a rival of the Taliban, with whom the group shares an austere Sunni ideology.