GF Bital 3Q2003 Results

HSBC Holdings PLC
28 October 2003

                             GRUPO FINANCIERO BITAL

                         QUARTERLY RESULTS - HIGHLIGHTS

* Net income was MXN1,181 million for the nine months ended 30 September 2003,
compared with MXN262 million for the same period in 2002.

* Net income was MXN371 million for the quarter ended 30 September 2003,
compared with MXN125 million for the same period in 2002.

* Cost:income ratio for the nine months ended 30 September 2003 was 63.7 per
cent, compared to 76.4 per cent for the nine months ended 30 September 2002.

* Total capital ratio of Banco Bital was 14.7 per cent at 30 September 2003,
compared to 9.9 per cent at 30 September 2002, and 11.0 per cent at 31 December
2002.

Grupo Financiero Bital (GFBital) recorded net income of MXN1,181 million for the
nine months ended 30 September 2003, compared with MXN262 million reported for
the nine months ended 30 September 2002. Net income for the quarter ended 30
September 2003 was MXN371 million, compared with MXN125 million reported for the
same period in 2002. The improvement from the relatively weak 2002 results
reflected revenue growth driven by higher customer deposits, an expanding
consumer loan portfolio, strong trading results and higher fee income.

Comment by Sandy Flockhart, CEO of GFBital:

"Results to 30 September 2003 continued to exceed expectations. The growth in
our core Personal Financial Services and Commercial Banking business lines
remained robust. In addition, the contributions from traditionally strong HSBC
business lines such as treasury, credit cards, payments and cash management
enhanced GFBital's overall profitability. The existing HSBC Mexico operations
were successfully merged into GFBital and have produced the business synergies
expected.

"In August, we announced our intention to acquire Afore Allianz-Dresdner, a
pension fund management business, which will broaden the scope of financial
services offered by GFBital. We expect to close this transaction in November
2003. In early October, we completed the acquisition from ING of the 49 per cent
participation of Seguros Bital we did not already own. The full integration of
this insurance subsidiary into GFBital will concentrate the sales effort of
bancassurance products which are already growing rapidly. These acquisitions
bring with them a number of opportunities and we are excited at the prospect of
offering a full range of insurance and pension products to GFBital's six million
customers through our 1,400 branches and 4,500 automated teller machines.

"The capital adequacy ratio of Banco Bital has strengthened from 11.0 per cent
at 31 December 2002 to 14.7 per cent at 30 September 2003. During this same
period, non-performing loans have declined 46.3 per cent and the ratio of loan
loss reserves to non-performing loans has improved to 127.3 per cent. The bank's
capital position and overall balance sheet strength effectively positions the
institution for future growth."

Financial Review

Total revenues, before provisions, increased by 21.6 per cent to MXN11,989
million in the nine months ended 30 September 2003, compared to MXN9,861 million
for the same period of 2002.

The increase in net interest income of 27.9 per cent, compared to the previous
year, was driven by the growth in Personal Financial Services and Commercial
Banking, resulting in an increase in customer deposits, a growing consumer loan
portfolio and an overall stronger balance sheet. The bank's average net interest
margin of 5.9 per cent improved from 5.3 per cent as the bank enjoys the lowest
cost of funds in the Mexican banking market as the bank's funding mix improved
as a result of the steady growth in customer deposits.

Fees and commissions of MXN4,053 million for the nine months ended 30 September
2003 were up 7.0 per cent from 2002, due principally to higher transaction
volumes on products such as credit cards, bancassurance, ATMs and payments and
cash management.

Trading income of MXN959 million increased 55.2 per cent compared to the
previous year, driven by growing customer foreign exchange volumes and solid
results in both money market and proprietary foreign exchange trading.

Operating expenses increased by 1.4 per cent compared to the nine months ended
31 September 2002. The increase is explained by the integration of HSBC's
operations in Mexico and infrastructure expenditure to enhance the franchise.
Due to growing business volumes post HSBC acquisition, staffing levels have
increased modestly. Partially offsetting these increases has been the
development of an improved expense discipline and the renegotiation of various
contracts with third party suppliers. The cost:income ratio was 63.7 per cent
for the nine months ended 30 September 2003, which compared favourably with the
level of 76.4 per cent reported in the same period of the previous year.

The size and composition of the balance sheet principally reflects the cleanup
of non-productive assets in November 2002 and significant reductions in
non-performing loans in 2003. Credit quality has improved from year-end 2002
with non-performing loans (NPLs) down 46.3 per cent and the ratio of loan loss
reserves to NPLs strengthening from 115.8 per cent to 127.3 per cent.

GFBital is one of the five largest banking and financial services institutions
in Mexico, with some 1,400 branches, 4,500 ATMs, and over 17,500 employees.

GFBital is a directly held, 99.76 per cent owned subsidiary of HSBC Holdings
plc. Headquartered in London, with over 9,500 offices in 79 countries and
territories and assets of US$983 billion at 30 June 2003, the HSBC Group is one
of the world's leading banking and financial services organisations.

These results form the basis of the contribution from HSBC's Mexican operations,
which will be reported in HSBC's Group accounts under UK GAAP. For UK GAAP
reporting, adjustments are made to conform accounting policies and to report the
impact of the fair value adjustments that were made on the acquisition of
GFBital. These adjustments include the valuation of holdings of securities at
market rates and adjustments to reflect the fair value of outstanding customer
advances (see HSBC's 2002 Annual Report & Accounts, note 26(c)).

Consolidated Balance Sheet
                                                              At                      At                   At
Figures in constant MXN millions                        30Sept03                 31Dec02  (^)        30Sept02  (^) 

Assets
Funds available                                           34,901                  33,384               87,609
Investments in securities                                 10,035                   8,759                4,853
Receivable under repo agreements                             119                      12                    7

Loans to IPAB/Fobaproa                                    55,653                  58,848               19,422
Other accruing loans                                      48,616                  50,808               44,456
Non-performing loans                                       7,439                  13,850                5,383
Total loan portfolio                                     111,708                 123,506               69,261
Minus: Reserve for loan loss                              (9,468 )               (16,038 )             (7,903 )
Net loan portfolio                                       102,240                 107,468               61,358

Foreclosed assets                                            848                     716                  723
Property, furniture and equipment                          3,085                   3,401                3,632
Permanent equity investments                               1,219                   1,109                  837
Deferred taxes                                             3,336                   4,151                3,959
Other assets                                              11,933                   5,266                4,631
Total assets                                             167,716                 164,266              167,609

Liabilities
Demand deposits                                           78,417                  81,748               69,841
Time deposits                                             53,450                  51,855               65,754
Total deposits                                           131,867                 133,603              135,595
Loans from banks and other institutions                    8,934                  10,944               17,053
Payable under repo agreements                                 80                      65                  274
Subordinated debentures                                    1,923                   2,223                1,571
Other liabilities                                         12,672                   7,383                4,480
Total liabilities                                        155,476                 154,218              158,973
Capital
Paid-in capital                                           13,517                  20,235               11,906
Earned capital                                            (2,298 )               (10,228 )             (3,342 )
Minority interest                                          1,021                      41                   72
Total shareholders' equity                                12,240                  10,048                8,636
Total liabilities & capital                              167,716                 164,266              167,609

(^) In accordance with Mexican GAAP, figures appear in constant pesos at 30
September 2003, which means prior period figures are adjusted to account for the
inflationary impact in order to enhance comparability.

Consolidated Income Statement
                                              Quarter         Quarter         Nine months        Nine months
                                                ended           ended               ended              ended
Figures in constant MXN millions             30Sept03       30 Sept02  (^)       30Sept03           30Sept02  (^) 

Interest income                                 3,615           4,444              12,989             12,873
Interest expense                               (1,482 )        (2,638 )            (5,937 )           (7,475 )
Monetary position (NII)                           (40 )            18                 (75 )               56
Net interest income                             2,093           1,824               6,977              5,454
Provision for loan loss                          (544 )          (624 )            (2,235 )           (1,506 )
Adjusted net interest income                    1,549           1,200               4,742              3,948
Fees and commissions                            1,398           1,408               4,053              3,789
Trading income                                    285             211                 959                618
Total net revenues                              3,232           2,819               9,754              8,355
Operating expenses                             (2,556 )        (2,461 )            (7,642 )           (7,533 )
Operating income                                  676             358               2,112                822
Other income (expenses)                             8             (58 )               (27 )             (223 )
Net income before taxes                           684             300               2,085                599
Income tax and profit sharing                     (67 )           (17 )              (181 )              (97 )
Deferred income tax                              (260 )          (178 )              (747 )             (250 )
Net income before subsidiaries                    357             105               1,157                252
Undistributed net income from
  subsidiaries                                     47              55                 131                131
Net income from continuing
  operations                                      404             160               1,288                383
Extraordinary & non-recurrent                       -             (34 )                 -               (118 )
Minority interest                                 (33 )            (1 )              (107 )               (3 )
Net income                                        371             125               1,181                262

Breakdown of net income by subsidiary

Banco Internacional (Bank) (^^)                   326              72               1,062                204
Seguros Bital (Insurance) (^^^)                    40              32                 121                 76
Fianzas Mexico Bital (Bonding)                      3              21                  (3 )               35
Casa de Bolsa Bital (Stockbroker)                   2               -                   3                 (1 )
Almacenadora Bital (Warehousing)                    -               1                  (1 )                3
GFBital (Holding company)                           -              (1 )                (1 )              (55 )
Total net income                                  371             125               1,181                262

(^) In accordance with Mexican GAAP, figures appear in constant pesos at 30
September 2003, which means prior period figures are adjusted to account for the
inflationary impact in order to enhance comparability.

(^^) GFBital's ownership in Banco Internacional amounted to 90.83 per cent at
30 September 2003. In addition to HSBC's stake in GFBital, HSBC Holdings plc
directly owns 9.15 per cent of Banco Internacional. Hence, total net income
attributable to HSBC amounted to MXN1,288 million at 30 September 2003.

(^^^) At 30 September 2003, GFBital's ownership in Seguros Bital amounted to
51.0 per cent. Effective 3 October 2003, GFBital owns 99.99 per cent of this
insurance company and fourth quarter results will reflect full ownership.


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