But Europe's biggest bank added that its pre-tax gains were pushed down by rises to staff costs and by money set aside to compensate customers in Britain who were mis-sold credit insurance.

The group headquartered in London said that profit after tax for the three months to March 31 rocketed to $4.153 billion (2.88 billion euros) from $2.631 billion in the first quarter of 2010.

Adjusted pre-tax profit fell eight percent to $5.5 billion, which was below analyst expectations for underlying earnings of about $6 billion according to a survey by Dow Jones Newswires.

HSBC's new chief executive Stuart Gulliver brushed aside the disappointing part of the results.

"Underlying profits held up well against a strong first quarter (in) 2010," he said in the group's earnings statement.

"We were profitable in all regions and customer groups, profits increased in each of our faster-growing regions and credit quality improved.

"There was double-digit revenue growth in many of our businesses in the faster-growing regions. We continued to increase customer lending in all regions, except North America, with strong growth in Asia and Latin America," Gulliver added.

In reaction to the results, shares in HSBC dropped 0.94 percent to 645.6 pence on London's benchmark FTSE 100 index, which was down 0.51 percent in late trade.

"The update is something of a mixed bag, allowing investors' attention to move on to the strategic update later in the week," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.

HSBC publishes a key strategy review on Wednesday and analysts have said that Gulliver, who took over the helm in January, could use the event to announce major cost-cutting measures.

"I don't think we are at an ideal business mix," Gulliver told reporters in a conference call on Monday. "I want to see a shift in revenue in the group toward the emerging markets," he added.

There have also been persistent reports in the British media that the lender has been looking at the possibility of switching its headquarters to Hong Kong from London to reduce the group's tax burden.

However, The Daily Telegraph newspaper reported on Monday that HSBC had delayed a decision on any potential move until next year.

HSBC was founded in Hong Kong and Shanghai in 1865 and the bank currently sees Asia as its most important region. In total it operates in 87 countries.

On Monday, it said that provisions set aside for bad loans dropped 37 percent to $2.4 billion in the first quarter. However its cost-income ratio, or costs as a proportion of income, rose to 60.9 percent, well above the group's target.

The rise reflected $440 million set aside to compensate clients mis-sold payment protection insurance (PPI) in Britain, higher staffing costs and changes to the value of HSBC's debt.

The bank wants to reduce the cost-income ratio to 52 percent or less but Gulliver admitted on Monday that it may now take longer than the two years expected to reach the goal.

Gulliver, HSBC's former head of investment banking whose hiring was announced last September, replaced Michael Geoghegan who stepped down after he reportedly lost a boardroom battle for the chairman's job.

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