A billion here, a billion there and pretty soon you're talking real money. HSBC has now notched up $21 billion in bad debts and structured credit losses in the past 18 months, yet has managed to paint itself as one of the more responsible and prudent of banks. It is a measure of the bank's size and geographic spread that it can flush away cash on such an industrial scale and still look rock solid. Certainly, the 28 per cent slide in first-half profits to $10 billion looks resilient against the probable loss that Royal Bank of Scotland will have to confess to this week.

Stephen Green, HSBC's chairman, was careful not to read too much in to the trend of results in the United States. But there are the beginnings of hope that the worst in the US may soon be over: the delinquencies and losses were running slightly lower in the first half of 2008 than in the previous six months.

It may be that HSBC, which was the first big bank to be hit by the credit crunch because it was lending directly to America's poor and credit-impaired, may be one of the first out. Nevertheless, extricating itself from loans to people who should never have been offered them in the first place has been bloody and will continue to be difficult for some time.

It demonstrates the folly behind the 2003 acquisition of Household International, the guts of the sub-prime business. HSBC still will not publicly accept that this was a £9 billion turkey, clinging to the argument that the deal gave it a springboard into the mainstream US credit card business.

But with every fresh loss, the claim looks more flimsy. The decision to shut down the car loans division means that another chunk of Household is now deemed valueless. There may have to be more goodwill writedowns on top of the $527 million shaved off the former Household's $10 billion value yesterday.

In the wholesale credit markets, meanwhile, HSBC has been injured, but to nowhere near the same degree as Citigroup, UBS and RBS. After the share price outperformance of recent months, HSBC is for now liberated from the Knight Vinke siege but it may be ruing its promise - forced out of it when the activist investor looked more of a threat - to return to its emerging markets roots.

Making any big acquisitions in the West now looks difficult for HSBC to justify. Yet it is in the West, not in the emerging markets, that there may well be opportunistic bargains to be had - with some banks trading at less than book value. HSBC is one of the few banks with the financial firepower to pounce. But it may now feel hamstrung by a strategic promise wrested from it in a moment of weakness. Activism can sometimes backfire.

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