HSBC yesterday said it more than doubled half-year profits to $11.1bn (£7bn) in the first six months of this year.

The bigger-than-expected surplus came amid mounting political furore over the industry’s support for business, although HSBC said it lent more to Britain’s small firms since the start of the year.

The pressure on banks to show they are freeing up credit is unlikely to ease as HSBC’s performance meant UK players are on course to report a combined half-year profits haul in excess of £10bn this week. HSBC, which generates a large slice of its profits from emerging markets, announced increased profits by 121 per cent year-on-year in the first six months of this year, or 34 per cent, to $10bn (£6.3bn), on an underlying basis. The UK side of the business saw underlying profits rise 23 per cent to £593m.

The bank, the first of five UK banks to unveil their results this week, saw shares rise, which was a pattern followed by other lenders as shareholders anticipated strong results.

The global results were helped by a sharp fall in bad debts, which dropped to their lowest level since the financial crisis, according to HSBC.

The leap in profits came despite a drop in trading revenues at its investment banking division, which was hit by “exceptional” stock market volatility in the second quarter of the year.

The profits announcement follow a warning from Chancellor George Osborne yesterday that banks had an economic obligation to lend to businesses.

Business Secretary Vince Cable has also called for dividends and bonuses to be targeted in a carrot-and-stick approach to boost lending to cash-strapped small firms.

HSBC risked stoking anger further by revealing a 39 per cent hike in staff pay and bonuses at its Global Banking and Markets division, to $2.5bn (£1.6bn) since the end of last year.

Michael Geoghegan, HSBC group chief executive, said the bank was braced for intense public and political scrutiny.

He added the banking sector and regulators had a responsibility to take the next steps to free up the flow of credit.

Lending was up four per cent across all regions since the end of last year and HSBC said demand for credit among businesses had increased, despite recent suggestions from the sector that there is a lack of appetite for borrowing.

Gross new lending to small businesses rose 38 per cent to £1.4bn in the half-year, although this figure does not include loans paid back.

The sector claims lending is being held back by rules requiring them to hold greater amounts of capital.

HSBC is the first of the major banks to report halfyear figures. These are followed by nationalised Northern Rock today, Lloyds Banking Group tomorrow, Barclays on Thursday, and Royal Bank of Scotland on Friday.