HSBC, the UK's biggest bank, delivered a 10% increase in full-year pre-tax profit, as a strong Asia performance helped offset a sharp rise in bad debt charges of its US division.

HSBC said pre-tax profit for the year to 31 December came in at $24.2 billion, up from $22.1 billion the previous year. That was ahead of analyst expectations.

Shares ticked up moderately in early trade, rising 6p, or 0.8%, to 772 pence. The improvement was driven by the Asia-Pacific region (excluding Hong Kong) where profit for the year jumped 70% to $6 billion.

That outweighed a downturn in the US, where profits slumped to $91 million from $4 billion in 2006, held back by rising bad debts. Total loan impairment charges at HSBC's US personal financial services arm soared by 70% to $11.7 billion.

As a result the group's overall bad debt charge came to $17.2 billion, an increase of 63%. HSBC, which lends to US consumers through its HSBC Finance Corporation unit, has been hit by rising default levels.

Defaults have been sparked as falling house prices make it impossible for overstretched borrowers to service their debts by tapping into their housing equity.

HSBC said the outlook for 2008 was 'uncertain,' predicting that the current economic slowdown and tight credit market conditions in the US 'may well get worse before they get better'.

'2008 is likely to be a year of caution in the financial sector until liquidity, transparency and the proper pricing of risk return to financial markets,' HSBC chairman Stephen Green said in a statement.

HSBC is paying a total dividend for the year of $0.9 per share, an increase of 11.1%.