LONDON (AP) — HSBC Holdings PLC, Europe's largest bank by market value, said on Monday it had been forced to write down the value of its assets by $4.9 billion in the third quarter, as the cost of bad loans in the US continued to mount and the credit market faltered.

In the US, loan impairments largely resulting from HSBC's big holdings of sub-prime mortgage debt cost the bank $4.3 billion during the third quarter — $700 million more than the previous quarter.

Speaking of the company's declining US performance, chief executive Michael Geogheagan said: "Recovery depends on the success of further economic stimulation, which is likely to take some time to take effect."

The lender also wrote down $600 million on its investment bank's global credit market positions.

However, despite the write-downs, HSBC, the owner of the Bank of Bermuda, said that third-quarter profit was higher this year than it was a year earlier because of strong growth in Asia and asset sales, which offset the declining US performance.

"Asia remained at the heart of core operating profitability of the group in the quarter," the bank said in a regulatory statement.

HSBC also completed sales of seven regional banking subsidiaries in France to Banque Federale des Banques Populaires during the third quarter, which boosted its pretax income during the three-month period by $2.4 billion. The bank did not provide a third quarter net profit figure.

"These numbers are something of a mixed bag," said Richard Hunter, head of British equities at Hargreaves Lansdown Stockbrokers. In August, HSBC reported that net profit for the first half of the year — the six months through June 30 — plunged 29 percent to $7.7 billion from $10.9 billion during the same period last year.

Then, as now, the biggest losses came from the North American market, which HSBC depends on for around a quarter of its revenue. Operations there posted a first-half loss of $2.9 billion, compared with profit of $2.4 billion a year earlier.

Chief executive Geogheagan said the bank would suffer along with the world economy in the anticipated coming global recession. "As the market deteriorates in the US and Europe, we will be affected to the extent that our customers are affected," he told journalists on a conference call.

However, he was optimistic that the bank was well-placed to prosper as soon as the global economy recovers because it is not taking government bailout money as some of its rivals are.

Royal Bank of Scotland PLC, HBOS PLC and Lloyds TSB Group PLC are set to receive as much as £37 billion from the British government. In exchange, the government will become the largest shareholder in the banks.