Bad debts hit HSBC again in the three months to the end of September.
HSBC has confirmed that it has been forced to write down $4.3 billion (£2.7 billion) worth of assets as a result of its exposure to the US sub prime loans. The bank said its losses increased by $700 million during the third quarter of this year.
It also wrote down $600 million (£384 million) on the global credit market positions of its investment banking business and insisted continued turmoil in the financial markets is presenting "enormous challenges" for the banking sector.
Chief executive Michael Geogheagan said: "Recovery depends on the success of further economic stimulation, which is likely to take some time to take effect."
Despite the writedowns, HSBC announced that third quarter profits were higher than those recorded during the same period last year. This was due to strong growth in Asia, which helped to offset a weaker performance in the US. However, it did not give any precise figures.
In September, the bank announced that it would be looking to cut 1,100 jobs worldwide as a result of the ongoing financial market turbulence.
According to the Guardian, Michael Geogheagan has warned that government bailouts of financial institutions could encourage the return of risk taking in the banking industry.
