BANKING giant HSBC saw more than £6bn wiped off its market value after unveiling profit figures at the low end of expectations and saying the outlook for 2001 was "challenging".

Despite reporting a 22 per cent increase in pre-tax profits for 2000, stacking up to £6.7bn, the figures were lower than those expected by some analysts.

Comments about the impact the US slowdown could have done nothing to help shares.

Chairman Sir John Bond said: "The outlook for 2001 is challenging. It is clear that the rate of growth in the US, the principal motor for recent world economic growth, has slowed rapidly.

"This will have an effect on other economies, particularly those which depend on exports to the US.

"Competition in the UK shows no sign of abating and structural changes here and in Hong Kong ... suggest a testing environment ahead."

The fall came despite Sir John saying that historically, the bank had responded well to such conditions and he was confident it could do so again.

The chairman also said the past year had been one of "exciting developments" and had been marked by "organic growth, by the integration of recent acquisitions and by important new initiatives".

He said developments during the year had included buying French bank CCF, and joining forces with Merrill Lynch to establish an online broking and banking service for the affluent.

The bank also launched Internet banking in the UK, Hong Kong, Singapore, the US and Canada, he said.

In the UK, where HSBC has more than 1,600 branches, the group said operating profit rose from £1.5bn to £1.6bn.

Its First Direct arm, however, saw profits slip from £52m to £41m, hit by investment in the launch of its Internet banking service firstdirect.com.

Shares in HSBC closed down 72 at 955p.