HSBC Holdings said its third-quarter performance was "satisfactory" but warned of slowing revenue trends in an unpredictable business environment.
Pretax profits before goodwill in all HSBC's regions were ahead of the same period last year, the world's second-biggest bank by market value said in a trading statement.
But profit margins suffered a "gentle decline" amid competition in the United Kingdom and as the bank targeted more creditworthy, less-profitable customers in the United States.
Profitability was also squeezed by low interest rates in Hong Kong, where HSBC was founded in 1865 and still makes a quarter of its profit.
Revenues from trading in financial markets were ahead of the previous quarter but below the rate in the first half, and large corporate lending was muted, the bank said.
The bank said the outlook for 2005 was "challenging to predict", referring to conditions it highlighted in August, such as high consumer debt in Western countries, uncertainty about the US economy and the threat of international terrorism.