HSBC is targeting the expanding economies of China and India

Pre-tax profits came in at $12.5bn (�6.7bn) - beating forecasts.

HSBC said profits in Brazil, China and India all rose by 20% or more, while strong global equity markets had boosted corporate banking revenues.

But it warned of rising consumer debts in the UK, where it has reduced its market share of non-mortgage lending.

The bank said it had increased its global bad debt provision by $613m to $3.9bn for the period, but added that the corporate and commercial credit environments were "benign".

Increased risks

Pre-tax profits from HSBC's corporate banking division were up 37% in the first six months of 2006, compared to the same period in 2005.

"The global operating environment has been broadly favourable, with a stable US economy and a resurgent Japan counterbalancing the tightening effect of higher interest rates in most countries and increased energy costs," said group chairman Stephen Green.

The bank's shares ended the day down 3 pence or 0.3% at 971 pence.

HSBC is the first of a series of major UK-listed banks expected to announce bumper profits this week.

A strong housing market in the UK has boosted mortgage lending, while rising stock markets have produced a series of lucrative merger and acquisition deals and share flotations.

Bank of England deputy governor Sir John Gieve recently expressed concerns that investment banks were taking increased risks as they compete for new business.