HSBC warned yesterday that more small firms were getting into difficulty but that personal customers' ability to pay debt had improved. Delivering the bank's trading update, Douglas Flint, finance director, said Britain was the "least predictable" of the 77 countries in which HSBC operated.

The bank has tightened lending criteria in the UK but Mr Flint said it was too soon to say whether defaulting had peaked. He also reassured investors that group income was rising faster than costs.

HSBC, which this week announced the retirement of the chairman, Sir John Bond, rose 10.5p to 936.5p.



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