Europe’s biggest bank HSBC announced that it has written off $3.2bn (£1.6bn) in the first quarter of 2008, as a result of the US sub-prime market.

The write offs are lower than the final quarter of 2007 and are in line with HSBC’s predictions. It is also reported that a further $2.6bn is to be written off in its global banking sector.

The bank has stated that profits in the US had fallen this year but profits in other markets had remained sturdy. This latest writedown has taken the total amount of bad debts sustained by the bank to $14.6bn in the US during the last year.

HSBC announced a loss of $17.2bn on those investements which are linked to the credit crisis, this was much higher than expected. HSBC overall annual profits still went up by 10%. All five of the big UK banks have suffered loss through the credit crisis, although HSBC seems to be the hardest hit.

HSBC Chairman Stephen Green said he thought the years ahead looks uncertain. HSBC did see strong growth in the Asian businesses.