Banking giant HSBC yesterday unveiled a forecast-beating five per cent rise in half- year profits to £6.03 billion as it reaped the rewards of its major global presence.
The group, which generates less than a quarter of its earnings from the UK, said its move into new and emerging markets contributed to the improvement.
It said the UK continued to be its worst market for bad debt - but action taken to address this was starting to have an impact. HSBC was reporting for the first time under new accounting rules.
This made it difficult for analysts to draw up forecasts, with the range of predictions running from £5.2 billion to £5.8 billion.
It is the first of the country's top four banks to report interim results this week.
The figures prompted its shares to move 11.25p higher at 934.5p after bucking City expectations of a fall in interim figures.
As well as its high street operation, it runs the First Direct online bank in the UK and owns consumer lending giant Household in the United States.
Chief executive Michael Geoghegan said there had been a deterioration in consumer credit in the UK but that it was not something of a "significant" nature.
This type of lending accounts for a smaller proportion of HSBC's business than that of many of its rivals.
The group said measures, such as its decision to share credit records with other lenders, were starting to be reflected in its credit outlook.
"We are quite confident that we have the management skills to manage any deterioration in the overall market here in the UK in regard to personal debt," Mr Geoghegan said.
The group said its success in expanding its personal finance services and commercial banking businesses in new and emerging markets were a driver of the results.
Mr Geoghegan, who became head of HSBC's UK arm last year, did not say whether bad debt in the UK was expected to get worse, saying this would depend on consumer confidence.
HSBC's UK arm, which includes about 1,500 branches, gained market share in all its core product areas.
Chairman Sir John Bond said the rate of economic growth was slightly lower than in the first half of 2004 in many of the group's major markets.
He said: "To a large extent our results are a measure of our success in expanding our personal financial services and commercial banking businesses in new and emerging markets."
Sir John also said the first half figures highlighted HSBC's success in expanding consumer finance in emerging markets, adding that the ban's focus on retail and commercial banking would be more important, amid fewer opportunities to generate profits from treasury activities in the current interest rate environment.
HSBC is the second large UK bank to update investors on trading, but unlike Lloyds TSB, whose shares dipped last week on higher retail bad debts, HSBC is less exposed to fall- out from Britain's £1 trillion consumer spending spree.
HSBC, which has operations in 77 countries, is more than a year into a five-year plan to boost growth and is targeting emerging middle classes and growing companies in countries such as Brazil, Mexico, South Korea and China.
HSBC has 110 million customers around the world and employs 253,000 staff.