LONDON (MarketWatch) -- Banking giant HSBC Holdings said Tuesday that that its third-quarter underlying pretax profit was “significantly ahead” of a year earlier, in part due to the first drop in U.S. impairment charges in more than three years.

The group said on a reported basis, third-quarter results will be lower than a year ago due to charges linked to the changing value of its own debt.
The bank said total loan impairments and other risk provisions declined in the third quarter from earlier in the year and were at their lowest level since the second quarter of 2008.
In the U.S., impairments on the consumer finance portfolio that is being run down declined for the first time since the start of 2006.
Even with higher levels of unemployment, credit conditions in the U.S. stabilized and the severity of losses on parts of the real estate lending portfolio also steadied, the bank said.
“The more positive signals that we saw in the U.S. run-off portfolio in the first half have continued, with the result that our North American operations did not require any capital support from the group during the quarter,” said CEO Michael Geoghegan.
“We should have further evidence by the year-end as to whether this is a sustainable trend,” he added.
Shares in the group climbed 3.1% in London after the announcement, outperforming most other European banks.
In the investment banking arm, revenue and profit declined from the higher levels at the start of the year, but was still “well ahead” of the third quarter of 2008, helped by strong credit trading revenue.
“I believe that the biggest jolt has now passed through the global economy. But it is too early to claim victory, especially while unemployment is still rising in the West,” said Geoghegan.
“The world will likely experience a two-speed recovery and emerging markets currently offer the brightest prospects for growth. Indeed, it now seems clear that they will drive the global recovery,” he added.
The bank said earlier this year that it was moving its CEO's main office to Hong Kong from London to take advantage of the opportunities for growth in Asia.