HSBC has reported an 18% fall in first quarter net profits to $4.3bn (£2.9bn) – with the bank blaming tough market conditions at the start of the year and higher taxes.

The bank, Europe’s biggest lender, said the stock market collapse in January sparked by falling world oil prices and fears over China’s economy had “reduced client activity”.

Revenue fell 4% compared to the same period last year to $13.9bn, HSBC said.

Chief executive Stuart Gulliver said: “Market uncertainty led to extreme levels of volatility in January and February, which affected our ability to generate revenue in our Markets and Wealth Management businesses.

“However, our diversified, universal-banking business model helped to cushion the impact through growth in other parts of the bank.

“Commercial Banking continued its momentum in spite of the slow-down in global trade, and we increased market share across our strategic trade corridors.

“We also grew revenue elsewhere in Retail Banking and Wealth Management, particularly from current and savings accounts in Hong Kong and the UK, and personal lending in Asia and Mexico.”

HSBC’s results statement completed the latest reporting season for major UK-based banks – with all of them taking a hit from the market volatility at the start of 2016 but none announcing any major writedowns associated with past mistakes.

HSBC, like its rivals, remains burdened by the payment protection insurance mis-selling scandal in the UK and other legacy issues.

The bank – which confirmed earlier this year it was to keep its headquarters in London – said its effective tax rate for the first quarter of 2016 was 25.7%, up from 19.4% in the same period a year ago “principally due to the 8% surcharge on UK banking profits”.