Profit earned by Britain's biggest bank fell to $4.3bn in the March quarter from $5.26bn in the same quarter a year earlier.
The lender's revenue declined by 5.8% to $14.98bn, as its clients' activity was hit by uncertainty in the markets.
HSBC's 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."
The bank increased its provisions to cover bad loans by $570m to $1.16 bn in the January-March quarter due to growing uncertainty in oil and gas, and metals and mining sectors.
However, its operating expenses dropped 7% to $8.26bn in the quarter on year-over-year basis, helped by its cost cutting measures.
Gulliver said: "All of our cost-reduction programmes are now under way and we have a good grip on operating expenses. We are confident of hitting our cost target by the end of 2017."
Its revenue from global banking and markets division fell sharply by 12% to $2bn, as volatility in foreign exchange, equities and credit markets reduced client activity in the first two months of the quarter.
Revenue from retail banking and wealth management services was down 6% to $1.3bn, mainly due to lower revenue in life insurance business in both Europe and Asia.
HSBC recorded 15% drop in its revenue from global private banking business in the quarter ended 31 March, as adverse market sentiment led to lower brokerage and trading activity in both Europe and Asia.
Image: HSBC headquarters, London, 8 Canada Square. Photo courtersy of HSBC.
