LONDON (AP) — HSBC said yesterday its net income more than doubled in the first half of the year, surprising investors and kicking off a week of earning reports from British banks in which even part-nationalised Lloyds Banking Group is expected to announce a return to profit.

If analysts' upbeat forecasts are correct, the results will likely provoke further complaints that banks are starving business of needed capital while indulging their own executives with fat bonuses.

HSBC Holdings PLC, Europe's largest bank in terms of deposits, said its first-half net profit was $6.76 billion compared to $3.35 billion a year earlier as provisions for bad loans fell by nearly half.

Operating income was $35.55 billion, up 2.3 percent. It did not report quarterly figures.

HSBC said provisions for bad loans and other credit risks amounted to $7.5 billion, the lowest since the outbreak of the global financial crisis and down from $13.9 billion a year earlier.

The improvement was driven by a reduction in the HSBC Finance portfolio, formerly the US-based Household International, which operated the Beneficial and Household Finance brands, which HSBC acquired in 2002. That acquisition made HSBC the biggest sub-prime mortgage lender in the United States.

The bank said it trimmed $10 billion from its balances in those portfolios in the first half, to a total of $69 billion.

After HSBC, nationalised mortgage lender Northern Rock will report earnings today, followed by Lloyds Banking Group tomorrow, Barclays on Thursday and Royal Bank of Scotland on Friday.

The market consensus is that Lloyds, which earlier announced that it earned a profit in the first quarter but released no figures, will report a pretax profit of £800 million. The bank had a net profit of £2.8 billion in 2009 but posted a pretax loss — a figure which gets more attention in Britain — of £6.3 billion.

HSBC said it was profitable in every region except North America, where it reported a pretax loss of $80 million on an underlying basis. Still, that was $2 billion better than a year earlier, the bank said.

By region, HSBC said pretax profit in Asia was up 20 percent to $5.6 billion; up 36 percent to $900 million in Latin America; down 39 percent in the Middle East to $393 million and up 19 percent in Europe to $2.8 billion.

HSBC said its lending increased by four percent in the first half, led by a 15 percent gain in Asia.

Investors welcomed the results, and HSBC shares were up 4.8 percent at 676.7 pence on the London Stock Exchange following the release of the report.

"Today's numbers underline the overall strength of the bank, whilst the dramatic reduction in the loan impairment provision is an additional bonus," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.

Banks are under pressure in Britain to step up their lending even as they face new requirements to beef up their balance sheets.

The government's Treasury chief, George Osborne, said last week that banks were not meeting their obligation to lend, particularly to smaller businesses.

"Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank — either they have found it difficult to renew their overdraft or they demanded additional collateral, often someone's house," Osborne said in an interview published in The Sunday Telegraph.

HSBC said appetite for credit grew steadily in recent months, particularly from business customers, despite increasing economic uncertainty. "This is now feeding through into lending growth, a trend we expect to continue," the bank said.

The Forum of Private Business said that average monthly lending to small U.K. firms had fallen from £991 million ($1.57 billion) in 2008 to £564 million this year.

Howard Wheeldon, senior strategist at BGC Partners in London, said bank critics were "choosing to completely ignore that not so very long ago banks got their fingers badly burned chasing growth."

"The bottom line is that our politicians now want banks to make the same mistakes on misguided lending policies all over again," Wheeldon said.