HSBC Bank Canada 1Q 2004

HSBC Holdings PLC
26 April 2004

                                HSBC BANK CANADA
                    FIRST QUARTER 2004 RESULTS - HIGHLIGHTS

   •Net income was C$92 million for the quarter ended 31 March 2004, an
    increase of 26.0 per cent from C$73 million in the same period of 2003.

   •Return on average common equity was 21.3 per cent for the quarter ended
    31 March 2004 compared with 19.0 per cent for the same period in 2003.

   •The cost:income ratio was 56.0 per cent for the quarter ended 31 March
    2004 compared with 54.9 per cent for the quarter ended 31 March 2003.

   •Total assets were C$38.6 billion at 31 March 2004 compared with C$35.4
    billion at 31 March 2003.

   •Total funds under management of C$15.8 billion at 31 March 2004 compared
    with C$11.5 billion at 31 March 2003.

Financial Commentary

HSBC Bank Canada recorded net income of C$92 million for the quarter ended 31
March 2004, an increase of C$19 million, or 26.0 per cent, from C$73 million for
the first quarter of 2003. Net income for the first quarter of 2004 benefited
from a one-time change following the adoption of the Canadian Institute of
Chartered Accountants new accounting requirements in accounting for mortgage
loan prepayment fees that increased income before taxes by C$14 million.
Excluding this increase, net income was C$83 million, 13.7 per cent higher when
compared with the first quarter of 2003.

Commenting on the results, Lindsay Gordon, President and Chief Executive
Officer, said: "Results for the quarter were good. We are pleased with the solid
growth in consumer and commercial loans. However, low interest rates and the
competitive environment in residential mortgages and personal deposits have
impacted our net interest margins. The improvement in equity markets and our
ongoing investments in the wealth management businesses have resulted in strong
growth in funds under management and in higher retail brokerage commissions.
Credit losses were lower for the quarter compared with the same period in 2003,
which was reflective of the improving credit environment. This was partially
related to the low interest rate environment and recovering economy in Canada
and in the United States.

"Our focus for 2004 is to continue the excellent service that we provide to our
customers and to grow our various core lines of businesses. This means we must
be focused on allocating our resources to those businesses that offer the
greatest opportunities for growth while continuing our strong expense discipline
and risk management.

"We are excited to welcome Intesa Bank Canada customers and the opportunity to
provide them with the expanded range of products and services that HSBC offers.
The acquisition of Intesa Bank Canada, expected to close in the second quarter
of 2004 subject to regulatory approval, will enable us to increase core business
operations in central Canada and strengthen our position as a leading
alternative to the big domestic banks."

Net interest income

Net interest income for the quarter ended 31 March 2004 was C$216 million
compared with C$218 million in the same quarter of 2003. Personal lending in
consumer loans continued to be strong in the first quarter of 2004 and was aided
by two successive decreases, of 25 basis points each, in the Bank of Canada's
overnight lending rate and prospects of an improving economy during 2004.

The net interest margin, as a percentage of average interest earning assets, was
2.57 per cent for the quarter ended 31 March 2004 compared with 2.79 per cent
for the same period in 2003. It was negatively impacted by extremely competitive
product pricing, particularly in personal financial services, and the low
interest rate environment. This was consistent with the trend experienced by the
industry in 2003.

Other income

Other income was C$127 million for the quarter ended 31 March 2004 compared with
C$101 million for the same period in 2003, an increase of 25.7 per cent. Capital
market fees in the first quarter of 2004 were higher than the same period in
2003 due to increased retail brokerage commissions which were driven by the
rebound in equity markets, beginning in 2003, and an increase in the number of
investment advisors. Higher realised gains from merchant banking activities
benefited other income in the first quarter of 2004 compared with the same
period in 2003. Foreign exchange revenue was higher in the first quarter of 2004
as customer activity increased due to the continued volatility of the Canadian
and US dollars. Credit fees were higher in the first quarter of 2004 compared
with the first quarter of 2003. This was due to higher volumes in bankers'
acceptances in 2004 driven by customer preference for shorter-term funding in a
decreasing interest rate environment.

Non-interest expenses

Non-interest expenses were C$192 million for the quarter ended 31 March 2004
compared with C$175 million for the same quarter in 2003. Salaries and benefits
in the first quarter of 2004 were higher than in the first quarter of 2003 due
largely to increased variable compensation resulting from higher capital market
fees. In addition, the first quarter of 2004 included C$2 million of stock-based
compensation, and C$3 million of higher pension and other post-retirement costs.
Other non-interest expenses were comparable with the first quarter of 2003.

Credit quality and provision for credit losses

The provision for credit losses was C$14 million for the quarter ended 31 March
2004 compared with C$20 million in the first quarter of 2003. The decrease in
the provision reflects the continuing improvement in the performance of the
credit portfolio primarily from declining corporate default rates and
encouraging economic conditions in Canada and the United States.

Gross impaired loans decreased C$41 million, or 16.9 per cent, to C$202 million
at 31 March 2004 compared with C$243 million at 31 March 2003 and is consistent
with C$203 million at 31 December 2003. Total impaired loans, net of specific
allowances for credit losses, were C$138 million at 31 March 2004 compared with
C$164 million at 31 March 2003 and C$148 million at 31 December 2003. The
general allowance for credit losses was C$258 million compared with C$247
million at 31 March 2003 and C$258 million at 31 December 2003. The allowance
for credit losses, as a percentage of loans outstanding, was 1.24 per cent at 31
March 2004 compared with 1.33 per cent at 31 March 2003 and 1.24 per cent at 31
December 2003.

Balance sheet

Total assets at 31 March 2004 were C$38.6 billion, up C$1.1 billion from C$37.5
billion at 31 December 2003. Total assets grew C$3.2 billion from C$35.4 billion
at 31 March 2003. The increase in assets during the first quarter of 2004
continued to be driven by growth in residential mortgages, personal loans and
commercial loans.

Total deposits increased C$0.7 billion to C$30.0 billion at 31 March 2004 from
C$29.3 billion at 31 December 2003. Compared with deposits at 31 March 2003,
total deposits grew C$1.6 billion from C$28.4 billion.

Impact of new accounting policy

In the first quarter of 2004, we adopted the Canadian Institute of Chartered
Accountants' new accounting requirements that provide additional guidance on
appropriate accounting policies. Residential mortgage loan prepayment fees
arising from repayment or renegotiation of the related mortgage, previously
deferred and amortised, will now be recognised when received. As a result, C$14
million, before income taxes, of previously deferred mortgage prepayment fees
were recognised and disclosed separately on the statement of income.

Discontinued operations

In the first quarter of 2004, Canadian Western Bank (CWB) and HSBC Bank Canada
signed a letter of intent for CWB to acquire all of the shares of HSBC Canadian
Direct Insurance Incorporated (CDII) for a cash payment of C$25.4 million. The
transaction is expected to close in the second quarter of 2004, subject to
regulatory approval. For financial reporting, the income and expenses of CDII
have been disclosed on the statement of income as income from discontinued
operations, net of income taxes, for the current and comparative quarters. On
the balance sheet, CDII assets at 31 March 2004 of C$79 million have been
recorded as assets held for sale and included in other assets. Correspondingly,
CDII liabilities of C$60 million have been recorded as liabilities pending sale
and included in other liabilities.

Total assets under administration

Funds under management were C$15.8 billion at 31March 2004 compared with C$14.3
billion at 31 December 2003. Including custody and administration balances,
total assets under administration were C$20.7 billion compared with C$18.7
billion at 31 December 2003. Growth in funds under management in the first
quarter of 2004 was aided by the increased number of investment advisors and by
the general rebound in equity markets.

Capital ratios

The bank's tier 1 capital ratio was 8.3 per cent and the total capital ratio was
10.9 per cent at 31 March 2004. This compares with 8.4 per cent and 11.1 per
cent, respectively, at 31 December 2003 and 7.9 per cent and 10.8 per cent,
respectively, at 31 March 2003. The ratios in the first quarters of 2004 and
2003 were reduced by dividends on common shares of C$50 million in 2004 and
C$150 million in 2003.

Preferred share dividends

A regular dividend of 39.0625 cents per share (totalling C$2 million) has been
declared on the Class 1 Preferred Shares - Series A. The dividend will be
payable in cash on 30 June 2004, for shareholders of record on 15 June 2004.

About HSBC Bank Canada

HSBC Bank Canada (HSB.PR.A - TSX), a subsidiary of HSBC Holdings plc, has more
than 160 offices. With over 9,500 offices in 79 countries and territories and
assets of US$1,034 billion at 31 December 2003, the HSBC Group is one of the
world's largest banking and financial services organisations. For more
information about HSBC Bank Canada and its products and services, visit our
website at hsbc.ca.

Copies of HSBC Bank Canada's first quarter 2004 report will be sent to
shareholders during May 2004.

This document may contain forward-looking statements, including statements
regarding the business and anticipated financial performance of HSBC Bank
Canada. These statements are subject to a number of risks and uncertainties that
may cause actual results to differ materially from those contemplated by the
forward-looking statements. Some of the factors that could cause such
differences include legislative or regulatory developments, competition,
technological change, global capital market activity, changes in government
monetary and economic policies, changes in prevailing interest rates, inflation
levels and general economic conditions in geographic areas where HSBC Bank
Canada operates.

Summary

                                                Quarter ended
Figures in C$ millions                    31Mar04   31Dec03   31Mar03
(except per share amounts)

Earnings
Net income                                     92        73        73
Basic earnings per share                     0.19      0.15      0.15

Performance ratios (%)
Return on average common equity              21.3      17.0      19.0
Return on average assets                     0.95      0.75      0.81
Net interest margin                          2.57      2.54      2.79
Cost:income ratio                            56.0      61.4      54.9
Other income:total income ratio              37.0      35.0      31.7

Credit information
Impaired loans                                202       203       243
Allowance for credit losses
- Balance at end of period                    322       313       326
- As a percentage of impaired loans           159%      154%      134%
- As a percentage of loans outstanding       1.24%     1.24%     1.33%

Average balances
Assets                                     38,061    37,717    35,587
Loans                                      25,423    25,113    23,960
Deposits                                   29,895    29,700    28,464
Common equity                               1,711     1,658     1,510

Capital ratios (%)
Tier 1                                        8.3       8.4       7.9
Total capital                                10.9      11.1      10.8

Total assets under administration
Funds under management                     15,775    14,323    11,528
Custodial accounts                          4,971     4,409     3,285
Total assets under administration          20,746    18,732    14,813

Consolidated Statement of Income (Unaudited)

                                                    Quarter ended
Figures in C$ millions                      31Mar04   31Dec03   31Mar03
(except per share amounts)

Interest and dividend income
Loans                                           340       343       333
Securities                                       21        25        28
Deposits with regulated financial
  institutions                                   14        13        13
Total interest income                           375       381       374

Interest expense
Deposits                                        150       159       147
Debentures                                        9         8         9
Total interest expense                          159       167       156

Net interest income                             216       214       218
Provision for credit losses                      14         8        20
Net interest income after provision for
  credit losses                                 202       206       198

Other income
Deposit and payment service charges              20        20        20
Credit fees                                      18        18        16
Capital market fees                              32        29        16
Mutual fund and administration fees              14        14        13
Foreign exchange                                 17        17        14
Trade finance                                     6         6         6
Trading revenue                                   2         1         3
Securitisation income                             6         2         5
Other                                            12         8         8
Total other income                              127       115       101

Net interest and other income                   329       321       299

Non-interest expenses
Salaries and employee benefits                  100       106        85
Premises and equipment                           27        24        28
Other                                            65        72        62
Total non-interest expenses                     192       202       175

Income before effect of accounting change       137       119       124
Effect of accounting change                      14         -         -
Income before provision for income taxes
  and non-controlling interest in income
  of trust                                      151       119       124
Provision for income taxes                      (56)      (42)      (47)
Non-controlling interest in income of trust      (4)       (4)       (4)
Income from continuing operations                91        73        73
Income from discontinued operations               1         -         -
Net income                                       92        73        73
Preferred share dividends                         2         2         2
Net income attributable to common shares         90        71        71
Average common shares outstanding (000)     471,168   471,168   471,168
Basic earnings per share (C$)                  0.19      0.15      0.15

Condensed Consolidated Balance Sheet (Unaudited)

Figures in C$ millions            At 31Mar04   At 31Dec03   At 31Mar03

Assets
Cash and deposits with Bank of
  Canada                                 446          256          273
Deposits with regulated financial
  institutions                         3,933        3,373        3,485
                                       4,379        3,629        3,758

Investment securities                  1,997        2,234        2,607
Trading securities                       758          642          642
                                       2,755        2,876        3,249

Assets purchased under
reverse repurchase agreements          1,279        1,572          577

Loans
- Businesses and government           12,213       11,664       12,091
- Residential mortgage                10,965       10,880        9,946
- Consumer                             2,860        2,702        2,493
- Allowance for credit losses           (322)        (313)        (326)
                                      25,716       24,933       24,204

Customers' liability under
  acceptances                          3,249        3,247        2,779
Land, buildings and equipment            102          111          111
Other assets                           1,119        1,141          721
                                       4,470        4,499        3,611
Total assets                          38,599       37,509       35,399

Liabilities and shareholders'equity
Deposits
- Regulated financial institutions       631          641          827
- Individuals                         14,185       13,924       14,318
- Businesses and governments          15,150       14,774       13,231
                                      29,966       29,339       28,376

Subordinated debentures                  506          504          519

Acceptances                            3,249        3,247        2,779
Assets sold under repurchase
  agreements                              47           30           80
Other liabilities                      2,740        2,340        1,821
Non-controlling interest in trust
  and subsidiary                         230          230          230
                                       6,266        5,847        4,910
Shareholders' equity
- Preferred shares                       125          125          125
- Common shares                          950          950          950
- Contributed surplus                    171          169          165
- Retained earnings                      615          575          354
                                       1,861        1,819        1,594
Total liabilities and shareholders' 
  equity                              38,599       37,509       35,399

Condensed Consolidated Statement of Cash Flows (Unaudited)

                                                Quarter ended
Figures in C$ millions                     31Mar04   31Dec03   31Mar03

Cash flows provided by/(used in):
- operating activities                         426      (109)      375
- financing activities                         592       167       (96)
- investing activities                        (834)     (426)     (319)

Increase/(decrease) in cash and cash 
  equivalents                                  184      (368)      (40)
Cash and cash equivalents, beginning of
  period                                     3,449     3,817     3,637
Cash and cash equivalents, end of period     3,633     3,449     3,597

Represented by:
- Cash resources per balance sheet           4,379     3,629     3,758
- less non-operating deposits^                (746)     (180)     (161)
- Cash and cash equivalents, end of period   3,633     3,449     3,597

^Non-operating deposits are comprised primarily of cash that reprices after 90
days and cash restricted for recourse on securitisation transactions.

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