HSBC Holdings, Europe's biggest bank by market value, reported a 29 per cent drop in profit to US$7.7 billion (S$10.5 billion) in the first half-year as bad loans rose in the United States.

HBOS, Britain's biggest home lender, and Lloyds TSB have reported 70 per cent falls in earnings.

Alliance & Leicester, in the process of being taking over by Spain's Santander, had its profits nearly wiped out by the credit crunch, leaving it only £2 million (5.4 million) in the black.

Barclays is forecast to report a slump in first-half figures to £2.6 billion from £4.1 billion this time a year ago.