HSBC UK said customer lending lifted by $2bn (£1.5bn) in the first three months of the year “primarily driven by continued growth in mortgage balances”.

The British ringfenced arm of the bank posted a pre-tax profit up 3.2% to $1.7bn compared to a year ago, in a market statement.

However, the group warned that trading may slow due to higher global tariffs, sparked by US policies.

It said: “The macroeconomic environment is facing heightened uncertainty, in particular from protectionist trade policies, creating volatility in both economic forecasts and financial markets and adversely impacting consumer and business sentiment.”

The UK-based bank raised its expected credit losses by $202m to $876m in the first quarter of 2025, slightly higher than analysts’ estimates.

Across the group, debt provisions lifted to $900m, which is $200m higher than a year ago.

Overall, the global bank posted a pre-tax profit of $9.5bn in the period, down 25% from a year ago when it recorded net one-off gains related to the sales of its units in Canada and Argentina.

The group announced a share buyback of up to $3bn that begins after its annual meeting on 2 May.

Group chief executive Georges Elhedery said: “Our strong results this quarter demonstrate momentum in our earnings, discipline in the execution of our strategy and confidence in our ability to deliver our targets.”