HSBC has announced a 4% rise in first quarter profits to $7.1bn (£4.6bn) but raised its provisions for covering the cost of the payment protection insurance (PPI) scandal.

Europe's largest bank, which last month confirmed a story by Sky Newsthat it was to consider moving its base from the UK, said its profit performance was helped by a $3bn fall in operating expenses quarter-on-quarter.

While it credited a fall in costs for past mistakes, it still raised its provision for mis-selling PPI in the UK by $137m (£91m).

It took the total set aside by the bank to date to almost £2.6bn.

HSBC also admitted higher staff costs despite a wider focus on cost-savings.

Staff growth of 2,471 in the period was blamed on investment in its regulatory programme and compliance.

Chief executive Stuart Gulliver said: "Our business recovered well in the first quarter following a difficult 4Q14 (fourth quarter 2014)."

The results were the first announced by HSBC since its decision to review the location of its global headquarters, which could lead to a move to Hong Kong.

A decision was expected within months rather than years, Mr Gulliver said today.

Sky's City Editor Mark Kleinman understands the timeframe is six months.

HSBC, which is a substantial payer of corporation tax in the UK, has become increasingly concerned that bank-specific taxes and the future shape of regulation are making it uneconomic to remain based in London.

The bank, which has been under pressure from regulators and politicians over the Swiss tax evasion scandal which re-emerged in February, will face significant obstacles if it does decide to move its headquarters.

Some shareholders are concerned about the influence of Beijing if it relocates, while others are anxious that any decision to move is not seen to be driven by a reaction to the crisis at its Swiss private bank.