HSBC has reported a 28 per cent fall in profits for the first half of 2008 compared with the same period of last year.
The bank made $10.2 billion (£5.2 billion) in profit over the last six months, down by $3.9 billion (£1.98 billion) over the first six months of 2007.
The bank Europe's largest - also set aside another $10.1 billion to cover bad debts.
The loss comes despite an increase in total operating income to $42.9 billion (£21.7 billion) up two per cent on the $42 billion (£21.3 billion) recorded in the first half of 2007.
"The first half of 2008 saw the most difficult financial markets for several decades, marked by significant declines in profitability throughout much of our industry, with consequent recapitalisation and restructuring," explained Stephen Green, group chief executive.
"HSBC was not immune from the turmoil."
In the first half of 2008 HSBC made over half of its profits in Europe making $5.1 billion (£2.59 billion), some 50.5 per cent of all profit.
Despite the loss overall, HSBC's tier 1 capital and total capital ratios remained strong - at 8.8 per cent and 11.9 per cent, respectively, as of June 30th 2008.
A second interim dividend for 2008 of $0.18 (£0.09) per ordinary share will also be paid which, when combined with the first interim dividend for 2008, represents an increase of six per cent over the first and second interim dividends for 2007.
"Our principal concerns in this environment have been risk management, strict cost control, supporting our customers and continued investment to support our long-term strategic ambitions," added Mr Green.
"Our broad-based and resilient revenue streams continue to provide a stable platform from which to achieve strong, long-term performance."
HSBC also announced today is pushing for a cut in the $6.3 billion (£3.15 billion) price it agreed to pay for control of Korean Exchange Bank (KEB), following a sharp slump in the bank's share price.
A Korean Financial Services Commission deadline expired on Thursday, without approval of the deal allowing HSBC and present American owner Lone Star to walk away from the deal.
However, it appears to have the patience to complete the deal, albeit at a reduced cost.