HSBC yesterday fended off accusations that it was ripping off British customers as it set a new record for profits by a UK bank of £11.9 billion.

The banking giant reported an 11 per cent jump in pretax profits to £11.9 billion on the back of robust performances in Hong Kong and the US and a 28 per cent improvement at HSBC Bank, which covers Europe including the UK.

Its figures come in the wake of the £7.95 billion profits at Royal Bank of Scotland and the £5.28 billion made by Barclays - meaning that the big five banks earned more than £33 billion last year.

HSBC charges for bad loans rose by £914.9 million during the year and came against a backdrop of rising personal bankruptcies in the UK, which generates around one-fifth of HSBC's earnings.

Announcing total impairment charges of £4.43 billion across its global operations, HSBC said action taken to tackle bad debts in the UK began to have a positive effect during the final six months of 2005.

Dyfrig John, the new chief executive of HSBC Bank, said UK profits from personal financial services rose 24 per cent to to £831 million and included contributions from M&S Money, which was sold by retailer Marks & Spencer when it fended off a £9.1 billion takeover campaign from retail tycoon Philip Green in 2004, and First Direct.

In terms of its HSBC branches alone, the bank boosted profits by 15 per cent in the UK on the back of higher demand for its savings products and mortgages.

The commercial banking operation saw profits up 20 per cent to £812 million.

Joe Garner, head of customer propositions, said: "We have grown our market share in all our core consumer categories."

Despite the fact that more Britons were struggling to repay loans and personal bankruptcies have gone up - rising energy costs and higher interest rates have put over-stretched borrowers under pressure - Mr John said provisions for bad debts were rising at a slower pace than total income.

Discussing the outlook for credit quality in the UK generally, he said: "If there continues to be stability in the housing market and employment stays where it is, then we've got a pretty stable position."

HSBC finance director Douglas Flint said the bad debt picture should improve in 2006 as tighter criteria on UK lending introduced last year begins to take effect.

Though profits from personal financial services outstripped growth in business banking, Mr John rejected claims that the banking industry was cashing in at the expense of UK customers.

He said HSBC made a profit of £1.05 per week from each of its UK personal customers, dismissing talk of a windfall tax on the banking sector as "quite speculative".

"I think the UK has shown yet again that we are highly successful and support not just the people who bank with us but we also contribute significantly to people's pensions in old age," Mr John said.

According to Mr Garner, one in three Britons has an interest in HSBC through their status as a customer, pensions policyholder or shareholder.

He added that the bank was investing heavily in its branch network and services such as online and telephone banking.

HSBC said the outlook in the near term was encouraging because the UK economy was resilient, Japan and Germany were recovering and growth in the United States remained strong.

But it flagged up long-term worries such as "the unprecedented level" of trade imbalances and the fact that people were living longer, putting greater strain on financial markets.

Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers, said: "There may be a tinge of concern over the company's cautious longer term outlook, but for the near term the company is firing on all cylinders."