Banking giant HSBC said on Monday that its net profit more than doubled to $13.16 billion (9.56 billion euros) last year as bad debts plunged to the lowest level since 2006.
HSBC said in a results statement that pre-tax profits soared 170 per cent to $19 billion in 2010, while loan impairments and other credit risk provisions dived 47 per cent to $14.04 billion. Revenues rose 3.1 per cent to $68.3 billion.
"Underlying financial performance continued to improve in 2010," HSBC chief executive Stuart Gulliver said in the results statement.
"All regions and customer groups were profitable, as Personal Financial Services and North America returned to profit," said Gulliver, who replaced Michael Geoghegan last month.
"Commercial Banking made an increased contribution to underlying earnings and Global Banking and Markets also remained strongly profitable, albeit behind 2009's record performance, reflecting a well-balanced and diversified business."
Market expectations, however, had been for total net earnings of $14.02 billion, according to Dow Jones Newswires, with the shares suffering as a result on the London stock market.
In mid-morning trade, HSBC shares were down 4.13 per cent to 681.70 pence in a slightly lower London market.
The bank also said Monday that former investment banking head Gulliver was rewarded a £5.2-million bonus that will be deferred in shares. That took his total 2010 pay package to £6.2 million.
Geoghegan, meanwhile, was handed a bonus of £3.8 million, giving him a package of £5.8 million.
HSBC, which survived the global financial crisis without taxpayer support, unlike many rivals, stressed that it would not forget the financial crisis and the responses of governments around the world.
"At HSBC, we shall not forget what happened to precipitate the scale of reform now underway," chairman Douglas Flint said in the statement.
"Although the financial turmoil arising from the events of 2007-2008 has largely moderated, in large part as a result of co-ordinated government action and support to the financial system, we enter 2011 with humility, ready to apply right across HSBC all of the lessons learned, notwithstanding that HSBC itself neither sought nor received support from any government."
Despite lower-than-expected net profits, investors drew some comfort from news of plunging bad debts and a return to the black in North America.
"We are encouraged with the return of profit in North America after three years of losses, the decrease in bad loans and a solid performance from the Personal Finance Division," said Atif Latif, director of trading at Guardian Stockbrokers in London.
Turning to the Middle East and North Africa, HSBC said it remained committed to the region, which has been rocked by unrest after protestors ousted the leaders of Egypt and Tunisia in recent weeks.
"We have been closely watching events unfold in parts of the Middle East and North Africa," Gulliver said.
"Our primary concern is for the security of our 12,000 staff across the region and we continue to work to ensure their safety," he said.
"As a strongly capitalised global bank, HSBC's financial performance has not been materially affected by events to date. HSBC has been present in the Middle East for more than 50 years and we remain absolutely committed to its future.
"We also believe that the region's economies have a number of structural strengths which leave us positive on the longer-term outlook."
The group was boosted by the improving world economy and fast-growing emerging markets.
"Credit experience continued to improve, as a result of a stronger global economy and our actions to reduce balance sheet risk," Gulliver said.
"As a globally-connected bank with a growing presence across the world's faster-growing regions, HSBC also benefitted from higher trade volumes and strong momentum in emerging economies, especially in Asia.
"Asia contributed the largest proportion to underlying pre-tax profits, while the contributions made by Latin America and the Middle East also increased.
"Together with our conservative management of the balance sheet, this improved performance allowed us to concentrate on serving our customers and to further strengthen our capital position."
The bank is headquartered in London but the group was founded in Hong Kong and Shanghai in 1865 and the bank regards Asia as its most important region.