HSBC has warned that conditions in financial markets are at their toughest "for decades" after suffering a 28% fall in half-year profits.
Europe's largest bank saw profits drop by $3.9bn to $10.2bn (Ј5.2bn) in the first six months of the year, as its North American arm made Six Killed in Gunfight Outside US Consulate in Istanbul ...
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The firm announced $3.7bn in fresh credit writedowns.
HSBC has been among the banks worst hit by the credit crunch, whose financial toll has run into the many billions.
It has already announced writedowns in the value of its assets - linked to the slump in the US housing market - of more than $15bn.
US exposure
Despite the steep fall in profits, HSBC said its performance had been "resilient" given the prevailing market turbulence.
HSBC saw profits rise in Europe, Asia-Pacific and Latin America in the first six months, but problems in the US weighed heavily on its balance sheet.
Of Europe's top banks, HSBC has among the heaviest exposure to the troubled US housing and credit markets.
Its credit writedowns so far this year have now risen to $10bn, compared with $6.3bn in the same period last year.
'Unsustainable'
Unlike many other British banks, HSBC has not been forced to ask its shareholders for extra cash to bolster its balance sheet.
However, the firm said it had not been "immune" from the liquidity and credit crisis afflicting the global banking sector.
It said the outlook for the banking sector remained "highly challenging" and said changes in bank lending practices and financial regulation were needed.
"It is clear that growth models in our industry based on high and increasing leverage will no longer be sustainable," said chairman Stephen Green.
"It is also clear that complexity in financial services and the recent consequences of failed risk management need to be addressed.
"Ultimately the real economy will recover from the crisis although it may get worse before it gets better. Financial markets will not, and should not, return to the status quo ante."
(BBC)
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