The bank had been expected to post profits of $23.4bn, as it enters the final year of its turnaround plan.

The 2012 results include a $5.2bn accountancy write-down on its debt. It also paid $1.9bn of fines and penalties as part of the settlement with US authorities and the FSA, and additional provisions of $1.4bn in respect of UK customer redress in 2012.

Meanwhile, underlying profit before tax rose 18% on 2011 to $16.4bn and the group reported a record year for commercial banking, with profit before tax of $8.5bn, up 7%.

Underlying revenues for the group were $63.5bn, up 7%. This included global banking and markets at $18.2bn, up 10%; commercial banking $15.9bn, up 8% and retail banking and wealth management $27.7bn, up 6%.

Stuart Gulliver, group chief executive, said: “HSBC made significant progress in 2012. First and foremost, we grew our business. We increased revenues, performed well in most faster-growing markets and enjoyed a record year in Commercial banking.

“We have made the business easier to manage and control by disposing of non-core businesses and surpassed our sustainable savings target. We also agreed a settlement with the US and UK authorities in respect of our past anti-money laundering and sanctions failings.

“Based on our current understanding of the capital rules we are extremely well-placed with regard to Basel III compliance, re-establishing our position as one of the best capitalised banks in the world. This provides a firm base on which to keep growing the business organically and allows us to increase dividends to US$8.3bn.”

Dividends declared for 2012 were $0.45 per ordinary share, up 10% on 2011, with a fourth interim dividend for 2012 of $0.18 per ordinary share. Total dividends were $8.3bn for the period.

It is planned the first three interim dividends for 2013 will be $0.10 per ordinary share, up 11%.