The bank makes less than a quarter of its profits in the UK

It says the situation will be adversely affected by the worsening economic outlook as retail sales slow.

But its US consumer finance arm, HSBC Finance, saw profits for its first quarter rise 33% to $626m (�340.67m) as its provisions for bad debt fell.

The net interest it receives on loans rose 3.7% to $1.89bn.

Brighter picture

We... see that increase (in US personal bankruptcies), but we feel that the overall credit performance continues to be very strong Bobby Mehta, chief executive of HSBC North America

"My own perception is that the US is likely to be a better picture of credit experience given the growth in employment, growth in hours worked and growth in dollars in average pay packets," Douglas Flint, HSBC finance director said.

By contrast, the retail slowdown in the UK could translate into a slowing economy and job losses or reduced earnings, leading investors to worry about bad debt at banks.

However, HSBC shares were among only two banking shares not to fall on the London stockmarket on Monday.

This is likely to be because it derives less than a quarter of its profit from the UK.

In the US, there was a rise in personal bankruptcies ahead of a tougher new law coming into force.

But Bobby Mehta, chief executive of HSBC North America, said "we continue to see that increase, but we feel that the overall credit performance continues to be very strong."

Its shares closed 0.4% higher at 865.5p.