HSBC profits rose for the first quarter of 2008, despite further write-downs of $3.2 billion in the US.

The bank reported in an interim management statement bad debt charges of $3.2 billion (£1.6 billion) in the US – following charges of $4.6 billion in the last quarter.

HSBC group chairman Stephen Green painted a gloomy picture for the world economy stating it was “increasingly likely” that the US would enter into recession.

He said: “The length and depth of [a US recession] is uncertain.

“The timing of any recovery in the US housing market, which is likely to be the primary stimulus in restoring confidence to the US economy, is also unclear.

“A housing market upturn will itself depend on liquidity returning to credit markets and a resumption of securitisation activity. While illiquidity in financial markets remains of continuing concern, the major economic risks facing the global economy now include inflationary pressures, particularly from rises in food and energy prices.”

Mr Green added outlook for the rest of the year remained “unusually difficult to foresee in the current environment”, but many parts of the world would enjoy economic growth, in particular emerging markets.

HSBC’s underlying revenue growth for the first quarter of 2008 was said to be “comfortably ahead” of 2007 even after absorbing additional write-offs of $2.6 billion from its global banking and markets division. Underlying cost growth over the same period was modest.

Michael Geoghegan, HSBC chief executive, said: “I am encouraged by the way we have increased pre-tax profits in every one of the major countries in which we operate in Asia-Pacific, the Middle East and Latin America.

“Also, our global banking and markets business was more profitable than in the preceding two quarters on the back of strong emerging markets performance, despite the write-down of $2.6 billion.”