LONDON: HSBC, Europe's biggest bank, on Tuesday reported that underlying quarterly pre-tax profit was "significantly ahead" of figures a year earlier, saying the global economy was over its "biggest jolt".

In an HSBC trading update, group chief executive Michael Geoghegan said emerging markets would "drive the global recovery."

HSBC also said its expenses linked to loan defaults fell to the lowest quarterly level for more than a year.

"Pre-tax profit for the third quarter of 2009 was significantly ahead of the third quarter 2008," HSBC said in a statement that did not provide figures.

Geoghegan added: "Driven by stabilised credit performance in the US, loan impairment charges have fallen to their lowest quarterly level for over a year."

Stripping out debt costs however, HSBC said third-quarter profits were lower compared with a year earlier.

"I believe that the biggest jolt has now passed through the global economy," Geoghegan said.

"But it is too early to claim victory, especially while unemployment is still rising in the West.

"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."

Geoghegan added that in Asia, HSBC has been "encouraged by renewed activity" in equity markets and increased demand for wealth management products.

"In Hong Kong, we increased commercial lending and maintained our leading position in mortgage lending," he also said.