The 2009 net profit of HSBC Holdings went up 2 percent to 5.8 billion U.S. dollars, as net trading income rose from 6.6 billion U.S. dollars to 9.9 billion U. S. dollars, the banking giant announced on Monday.

The results, however, were slightly disappointing. The share price of HSBC fell by over 3 percent in early trading in Europe.

The bank's net interest income and net fee income both fell, and loan impairment charges and other credit risk provisions rose 9 percent to 26.5 billion U.S. dollars.

Group Chairman Stephen Green said the emerging markets are leading global recovery but the recovery in developed markets has been slow to start and unemployment remained high.

"Lower trade volumes, shrinking investment and rising unemployment combined to hurt personal and commercial banking customers everywhere ... although improved financial and capital market conditions led to stronger results in wholesale markets," Chief Executive Michael Geoghegan said in Hong Kong at the simulcast press conference.

Geoghegan saw some early signs of improvement in credit quality, saying that the loan impairments in HSBC's U.S. consumer finance run-off business fell by 16 percent and that he expected the group loan impairment charges to decline in 2010.

The run-off loan portfolio in HSBC fell by 22 billion U.S. dollars to 79 billion U.S. dollars, which Geoghegan described as " encouraging progress."

Green said that the underlying pre-tax profit of the group was up 56 percent to 13.3 billion U.S. dollars, after excluding the impact of the goodwill impairment, and that the underlying performance was significantly ahead of 2008.

The group pre-tax profit was down 24 percent to 7.1 billion U.S. dollars, as Hong Kong contributed 71 percent, the rest of Asia- Pacific contributed 59.3 percent and Europe, 56.7 percent, offset by a negative 109.3 percent from North America.

The board proposed a fourth interim dividend of 0.1 U.S. dollar a share, raising the year total to 0.34 U.S. dollar.

Geoghegan said the company will soon open its 100th outlet on the Chinese mainland, expecting higher consumption in China on investments in infrastructure and social security.

Hang Seng Bank, the local unit of HSBC, reported a net profit of 13.2 billion HK dollars (1.7 billion U.S. dollars), in line with market estimates.