Banking giant HSBC has said that the most difficult financial markets "for several decades" had knocked more than a quarter off profits in the first half of 2008.
The bank's global bad debt charges jumped 58% to £5.1 billion - with impairments of £3.4 billion in its troubled US consumer finance business largely to blame.
On top of this, HSBC wrote off a further £2 billion on investments hit by the credit crunch - leaving its pre-tax profits 28% lower at £5.2 billion.
Chairman Stephen Green said HSBC was "not immune from the turmoil". He added: "The outlook for the near term remains highly challenging with significant uncertainty. Globally, consumer confidence is declining and... the US economy continues to be weak, driven by continuing housing market difficulties.
"The UK and other economies in Europe which had enjoyed housing market booms have also weakened."
Despite the problems faced by the banking sector, HSBC stressed the strength of its balance sheet - in contrast with the fund-raising needed this year by rivals such as Barclays, Royal Bank of Scotland and Halifax Bank of Scotland.
HSBC has a broad geographical spread and a major presence in fast-growing emerging markets such as Asia and Latin America.
While it expects "less momentum" in emerging markets going forward as the global problems spread, it remained profitable in all regions except North America in the first half of the year.
In the US, HSBC's personal finance business crashed to a loss of £1.1 billion thanks to the loan write-downs at consumer finance arm HFC, which it bought in 2003 when the country's housing and credit market was booming.
The operation will now be focused on cards and consumer lending after the bank said it would put HFC's car finance business into orderly run-off.
HSBC described the US as a "difficult market, with rising unemployment and falling house prices" although there were some signs of hope as the consumer finance bad debts were 17% below the second half of 2007.
The group's investment banking business also wrote off £2 billion on the mortgage-backed investments affected by the credit turmoil. This sent profits at the division down 35% overall.
But in the UK, the company said it had doubled its market share of new mortgage lending from 3% to 6% after launching a product offering to match the previous interest rates of homeowners facing a big bill to remortgage their properties. This share peaked at 12% in May.
HSBC's commercial banking business meanwhile lifted pre-tax profits 23% in the UK, with arrears rates "broadly unchanged" despite a 13% rise in lending. Finance director Douglas Flint however said this situation was "likely to weaken" as the economic slowdown and rising costs fed through to businesses.
The bank has around eight million retail banking customers and one million small business customers in the UK.
HSBC's shares eased 1% following the results. Richard Hunter, head of UK equities at stockbroker Hargreaves Lansdown, said: "These results are something of a mixed bag, with some further hefty writedowns continuing to negate the progress being made in certain parts of HSBC's global portfolio.
"Whilst there were resilient performances in Asia in particular, even growth here is likely to lose a little momentum in the nearer term."