The bank said on Tuesday it had made good progress on all areas of strategy, including cost savings, and had shed 14,000 jobs since last year as part of Chief Executive Stuart Gulliver's plan to boost profitability. This also includes quitting areas where the bank lacks scale and increasing its focus on Asia.

Expenses rose on the year to $10.4 billion, however, due to a rise in performance-related costs in the investment bank and wage inflation in certain regions, such as Asia.

Like British peers, HSBC was also hit by another charge for the mis-selling of UK payment protection insurance, this time of $468 million, after a similar provision a year ago.

But the bank's underlying cost efficiency ratio improved from 58.7 percent a year ago to 55.5 percent in the first quarter of this year.

Gulliver's wants to lift return on equity above 12 percent by the end of 2013 and cut costs to below 52 percent of revenue. Annualized return on equity, a key measure of profitability, came in at 6.4 percent.

HSBC was boosted by a strong performance in its investment bank, where revenues came in at $5.8 billion, up more than 11 percent from $5.2 billion a year ago and a big improvement from the final quarter of last year. Income from fixed-income, currencies and commodities bounced back, echoing trends seen among rivals.

Losses from bad debts in the quarter were $2.4 billion, broadly flat from a year ago, but improved in the United States in particular, due to better foreclosure and impairment trends, where the bank is running down its consumer loans book.

HSBC said its underlying profit in the first quarter was $6.8 billion, up 25 percent on the year and above the $5.8 billion expected by analysts. Its statutory profit was $4.3 billion, hit by a negative $2.6 billion impact of movement in the value of its own debt.

At 0905 GMT, HSBC shares were up 1 percent at 560.4 pence in London, compared with a 0.3 percent fall on the UK's benchmark FTSE-100 index.

(Reporting by Steve Slater and Sarah White; Editing by Mark Potter)

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