HSBC's pre-tax profit rose 10 per cent last year, driven by buoyant growth in Asia which helped Europe's biggest bank absorb $17.2 billion in bad debts as the US housing crisis deepened.

Profit in Hong Kong rose 42 per cent and earnings jumped 70 per cent in the rest of Asia, but the bank's US arm made a loss as past risky loans to homeowners now in trouble hit it hard.

The London-headquartered bank, Europe's biggest by market value, reported record pre-tax profit of $24.2 billion for last year, up from $22.1 billion in 2006. Profits were below an average forecast of $24.7 billion by analysts - but were distorted by one-off items and did not include a $1.3 billion property gain expected by many.

Underlying profit growth was 5 per cent for the year, which analysts said was in line with forecasts.

The bank's impairment charge jumped $6.7 billion from 2006, or 63 per cent. Bad debts had been expected to come in at $15.8 billion, based on the average of forecasts from eight analysts.

HSBC shares closed up 3.1 per cent at 790 pence, the top performing stock in a weak UK market and lifting its value to over £93 billon ($185 billion).

The bank's US personal financial services unit swung to a loss of $1.8 billion from a $3.1 billion profit in 2006.

The problems stem from aggressive selling of subprime mortgages by its US arm HSBC Finance, formerly the Household business bought for $14.8 billion five years ago. North America bad debts were $12.2 billion, up 79 per cent from 2006.