SHARES in banking group HSBC nudged upwards yesterday after it posted a five per cent rise in half year pre-tax profits.

The bank said that it had put more cash aside to cover problem debts as rising interest rates and the slower housing market took their toll on UK consumers.

The worldwide group said the UK remained its most difficult credit market as more customers ran into trouble with loan repayments in the first half of its financial year.

However, HSBC's major global presence made it less reliant on the UK and allowed the group to post a forecast-beating five per cent rise in half-year pre-tax profits to $10.64bn (£6.03bn).

Interest rate rises, slower employment growth and the subdued property sector contributed to the trend, which led to HSBC increasing its provision for bad debt by about a fifth on a year earlier to $3.28bn (£1.86bn) in the six months to June 30.

HSBC will this month become the UK's first high street bank to provide details on its customers to credit reference agencies, in a bid to make it harder for people with poor records to take out loans.

HSBC, which generates less than a quarter of its earnings from the UK, has about 110 million customers worldwide - and employs 253,000 staff in 77 countries.

HSBC's UK arm, which includes about 1,500 branches, gained market share in all its core product areas.

Pre-tax profits at the UK personal financial services division, which provides services such as current and savings accounts, mortgages and pensions to individuals, increased to £392m from £384m.

Profits in commercial banking - which provides financial services to small and medium-sized businesses - rose to £410m from £354m in the same period last time.

Chairman Sir John Bond said the rate of economic growth was slightly lower than in the first half of 2004 in many of the group's major markets.

He said: "To a large extent, our results are a measure of our success in expanding our personal financial services and commercial banking businesses in new and emerging markets.

The results come after Lloyds TSB posted a seven per cent rise in half-year profits to £1.68bn on Friday and will be followed this week by Halifax and Bank of Scotland group HBOS, Royal Bank of Scotland and Barclays.

It also served to put the FTSE 100 on course for a third week of gains.