The Asia-Pacific was the second-most profitable region and chipped in earnings of US$3.5 billion. It was followed by Europe and then the Middle East.

The North American region was saddled with a US$5.5 billion loss.

'It is an exciting time to be in Asia,' Michael Geoghegan, the chief executive of the HSBC group, said in a statement yesterday.

'This is why I moved my principal office to Hong Kong in February this year, to manage the HSBC Group from the heart of the world's fastest-growing region.'

Global financial institutions have tried to reduce their exposure to developed markets like the United States and Europe where toxic loans and other fallout from the financial crisis have weighed on balance sheets.

HSBC has looked to Asia as an opportunity to prop up its earnings. Geoghegan announced last September that he would cross continents from the London headquarters. And the group is said to be planning a share sale in Shanghai that could raise more than US$5 billion once it gets the go-ahead from mainland regulators, according to Bloomberg.

Geoghegan did not expect a mainland listing to occur in the near term, however, because of the regulatory work required to open up the country's stock exchange to foreign companies.

HSBC will soon open its 100th branded mainland outlet.

The bank said that the market capitalisation of its strategic investments increased to US$25.4 billion last year.

Its profit from Hong Kong edged up in the second half to US$2.2 billion from US$2 billion in the first half of 2009. HSBC said it increased its deposits in the city and was the market leader in credit cards and residential mortgage lending.

Meanwhile, staff at HSBC's Hong Kong unit will receive a salary increase this year. The raise will be by 'low single digits ... in line with the market', Peter Wong Tung-shun, chief executive of the Hongkong and Shanghai Banking Corp, said.

The Hongkong and Shanghai Banking Corp's full-time staff in the city shrank 5.6 per cent last year to 26,192 employees.