HSBC Holdings fell just short of analysts' expectations with a 5 per cent rise in 2006 profits today.
The London-based bank reported a record 2006 pretax profit of $22.1 billion, up from $21 billion in 2005 and below an average forecast of $22.4 billion from a poll of analysts.
Europe's biggest bank took a $10.6 billion hit for bad debts after problems in its US mortgage lending.
The bank's group impairment charge was up $2.8 billion, or 36 per cent, from 2005. HSBC warned a month ago that problems had deepened in its lending to lower quality US home borrowers.