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HSBC has reported writedowns of £17.2 billion for 2007 in a year of "extraordinary strain" according to the bank's chairman.

Despite the losses from exposure to the US housing market, HSBC posted a ten per cent pre-tax profit rise to $24 billion (£12 billion) and earnings per share rose by 18 per cent to $1.65.

Total operating expenses rose 16 per cent to $39 billion compared with 2006.

In the US, loan impairment charges and other credit risk provisions rose by 79 per cent to $11.7 billion in the company's personal financial services business.

Stephen Green, group chairman, said: "2007 was a year when large parts of the international financial system came under extraordinary strain.

"For HSBC to achieve another new high in earnings, despite these conditions and the exceptionally weak performance of our US business, underscores the value of the strategic focus we announced early last year to drive sustainable growth by concentrating on the faster growing markets of the world."

Strong results in emerging markets in Asia-Pacific, Latin America and the Middle East helped offset the losses made in the US market.

In mainland China, HSBC made a profit before tax of $1 billion, a first for the company, in addition to $7 billion earned in Hong Kong.

Shares in the bank rose 0.46 per cent in morning trading to £7.69 on the London Stock Exchange.