HSBC racks up record £11.9bn profits

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HSBC smashed the record for annual profits by a UK bank today when it unveiled a surplus of 20.97 billion US dollars (£11.91 billion) for 2005.

The group said the figure was 11% higher than its haul of the previous year after its core businesses in the UK, United States and Hong Kong produced "robust performances".

But charges for bad loans rose by 1.61 billion US dollars (£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 7.8 billion US dollars (£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.

Today's results come a week after Royal Bank of Scotland unveiled profits of £8.25 billion before accounting for one-off items, while Lloyds TSB and Barclays have also cheered the City with bumper earnings.