HSBC CANADA 1Q03 RESULTS

HSBC Holdings PLC
16 May 2003

                                HSBC BANK CANADA

                    FIRST QUARTER 2003 RESULTS - HIGHLIGHTS


* Net income(^) was C$73 million for the quarter ended 31 March 2003, a decrease
of 3.9 per cent from C$76 million in the same period of 2002. Compared to the
fourth quarter of 2002, net income was C$8 million, or 12.3 per cent, higher.

* Return on average common equity was 19.0 per cent for the quarter ended 31
March 2003 compared to 19.7 per cent for the same period in 2002 and 15.9 per
cent for the fourth quarter of 2002.

* The cost:income ratio was 55.4 per cent for the quarter ended 31 March 2003
compared with 52.6 per cent for the quarter ended 31 March 2002 and 57.7 per
cent for the fourth quarter of 2002.

* Total assets were C$35.4 billion at 31 March 2003 compared to C$33.9 billion
at 31 March 2002 and C$35.2 billion at 31 December 2002.

* Total assets under administration were C$14.8 billion at 31 March 2003, of
which C$11.5 billion were funds under management and C$3.3 billion were custody
and administration accounts.

(^) HSBC Bank Canada acquired Merrill Lynch HSBC Canada Inc. ('MLHSBC') on 31
October 2002. For financial reporting, the income and expenses of MLHSBC were
accounted for effective 1 July 2002, the date HSBC Group acquired full ownership
of MLHSBC, and were recorded in the results for the fourth quarter of 2002.

Financial Commentary

HSBC Bank Canada recorded net income of C$73 million for the quarter ended 31
March 2003, a decrease of C$3 million, or 3.9 per cent, from C$76 million for
the same quarter of 2002 and C$8 million, or 12.3 per cent, higher than the
quarter ended 31 December 2002. Excluding one-off gains and expenses, net income
in the quarter was C$6 million higher compared to the same period in 2002 and
C$13 million higher compared to the fourth quarter of 2002.

Higher net interest income and lower provisions for credit losses in the quarter
were offset by lower other income and higher non-interest expenses compared to
the same period in 2002. Compared to the fourth quarter of 2002, higher net
interest income, lower provisions for credit losses and lower non-interest
expenses were partially offset by lower other income.

Martin Glynn, President and Chief Executive Officer, said: "Results for the
quarter were satisfactory, given the continued uncertainty in global equity
markets, and difficult economic conditions in Canada and internationally. Solid
growth in personal and commercial business volumes continued to drive our
performance as evidenced by higher net interest income. This growth also
benefited non-interest revenues as other income, excluding capital market
sensitive revenues and securitisation income, increased compared to the same
period last year.

"A focus for 2003 is to grow our core business by capitalising on North American
alignment with HSBC businesses in the USA and Mexico and by continuing to invest
in improving our delivery channels and services. Business Internet Banking was
launched in the first quarter and enables commercial clients to access banking
and certain trade finance services around the clock, all year round. A key
factor in the successful introduction was our ability to access the knowledge
and experience of our counterparts at other HSBC companies to ensure that
critical dates and milestones were met.

"HSBC Holdings plc completed the acquisition of Household International Inc. on
28 March 2003. We are excited about the prospects of working more closely with
our new colleagues in Household International as this will provide us with the
opportunity to offer a wider range of financial services to an expanded base of
retail and commercial customers in Canada. In addition, there are potential cost
synergies for HSBC Bank Canada by capitalising on Household's strong credit
management and technological capabilities."

Net interest income

Net interest income for the quarter was C$218 million, an increase of C$7
million and C$8 million from the first and fourth quarters, respectively, of
2002. Growth in net interest income continued to benefit from increased lending
volumes, primarily in consumer loans and residential mortgages.

The net interest margin, as a percentage of average interest earning assets, was
2.79 per cent for the quarter ended 31 March 2003 compared to 2.91 per cent for
the same period in 2002 and 2.63 per cent for the fourth quarter of 2002.

Other income

Other income was C$105 million for the quarter ended 31 March 2003 compared to
C$110 million for the same period in 2002 and C$123 million for the quarter
ended 31 December 2002. Other income in the first quarter of 2002 included a
one-off C$9 million securitisation gain. In the fourth quarter of 2002, other
income included a one-off gain of C$17 million realised on the sale of the
bank's shareholding in the Toronto Stock Exchange and capital market fees of C$8
million, arising as a result of the acquisition of MLHSBC.

Capital market fees in the first quarter of 2003 were lower than the same period
in 2002 and the fourth quarter of 2002 as a result of the challenging capital
markets and the restructuring of the institutional equity business in the second
quarter of 2002. Excluding the contribution from MLHSBC, capital market fees
were C$13 million in the quarter ended 31 March 2003 compared with C$20 million
for the first quarter of 2002 and C$11 million for the fourth quarter of 2002.

Excluding capital market fees, trading revenue, securitisation income, and the
one-off gain, other income increased 6.6 per cent compared to the same period in
2002, reflecting increased business volumes in the personal and commercial
banking lines of business. Other income was comparable to the fourth quarter of
2002, as increased fees from credit services were partially offset by lower
sundry other revenue.

Non-interest expenses

Non-interest expenses were C$179 million compared to C$169 million for the
quarter ended 31 March 2002 and C$191 million for the quarter ended 31 December
2002. Excluding the impact of MLHSBC, non-interest expenses were C$174 million
in the quarter, C$169 million for the first quarter of 2002 and C$182 million
for the fourth quarter of 2002.

Salaries and benefits in the first quarter of 2003 were higher than the first
and fourth quarters of 2002 primarily from higher medical benefit costs. Other
non-interest expenses in the first quarter of 2003 were higher than the same
period in 2002 due to a one-off operating expense and increased business volumes
in the bank. Compared to the fourth quarter of 2002, other non-interest expenses
were lower due to a one-off charge for rationalisation of leased office space
and additional restructuring costs in 2002. In addition, marketing costs were
lower in the first quarter of 2003 following a major campaign in the fourth
quarter of 2002.

The cost:income ratio for the first quarter of 2003 was 55.4 per cent compared
to 52.6 per cent for the same period in 2002 and 57.7 per cent in the fourth
quarter of 2002.

Provision for income taxes

The effective tax rate was 39.2 per cent for the quarter ended 31 March 2003
compared to 38.2 per cent for the same period in 2002 and 42.5 per cent for the
fourth quarter of 2002. The effective tax rate for the fourth quarter of 2002
reflected a number of one-off items.

Credit quality and provision for credit losses

The provision for credit losses was C$20 million for the quarter ended 31 March
2003 compared to C$25 million in each of the first and fourth quarters of 2002.
The lower provision level in 2003 is in line with expectations at this stage of
the economic cycle.

Total impaired loans decreased C$39 million, or 13.8 per cent, to C$243 million
at 31 March 2003 compared to C$282 million at 31 March 2002 and increased by
C$18 million, or 8.0 per cent, from the fourth quarter of 2002. The allowance
for credit losses was in excess of impaired loans by C$83 million compared to
C$49 million at the same time last year and C$86 million at the end of 2002. As
at 31 March 2003 a higher portion of loans were comprised of lower risk
residential mortgages. As a result, the allowance for credit losses, as a
percentage of loans outstanding, was 1.33 per cent compared to 1.45 at the same
time last year and 1.29 per cent at the end of 2002.

Balance sheet

Total assets at 31 March 2003 were C$35.4 billion, up C$1.5 billion from C$33.9
billion at 31 March 2002 and up C$0.2 billion from C$35.2 billion at 31 December
2002. The increase in assets continues to be driven by growth in personal
lending. Residential mortgages, net of securitisations, and consumer loans
increased by C$1.5 billion and C$0.2 billion compared to the first and fourth
quarters of 2002, respectively. Increased volumes in corporate lending have also
contributed to higher balances as acceptances and loans to businesses were C$0.4
billion higher compared to 31 March 2002 and C$0.5 billion higher compared to 31
December 2002.

Total deposits increased C$1.4 billion to C$28.4 billion at 31 March 2003 from
C$27.0 billion at 31 March 2002. Deposits from individuals grew C$0.8 billion to
C$14.3 billion and business and government deposits increased by C$1.5 billion
to C$13.2 billion over the same period.

Total assets under administration

Funds under management were C$11.5 billion at 31March 2003 compared to C$10.1
billion at 31 March 2002 and C$11.9 billion at 31 December 2002. Net movement in
the quarter was impacted by the continued weakness in the equity markets and the
weakening of the US dollar relative to the Canadian dollar. The acquisition of
MLHSBC added C$1.9 billion in funds under management as at 31 December 2002.
Including custody and administration balances, total assets under administration
were C$14.8 billion compared with C$13.0 billion at 31 March 2002 and C$15.1
billion at 31 December 2002.

Capital ratios

The bank's tier 1 capital ratio was 7.9 per cent and the total capital ratio was
10.8 per cent at 31 March 2003. This compares with 8.7 per cent and 11.4 per
cent, respectively, at 31 March 2002 and 8.4 per cent and 11.4 per cent,
respectively, at 31 December 2002. Ratios remained strong and afforded a C$150
million dividend on common shares paid in the first quarter of 2003.

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 2003, for shareholders of record on 13 June 2003.

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 80 countries and territories and
assets of US$759 billion at 31 December 2002, 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 2003 report will be sent to
shareholders during May 2003.

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                                                  31Mar03            31Dec02           31Mar02
(except per share amounts)


Earnings
Net income                                                                   73                 65                76
Basic earnings per share                                                   0.15               0.14              0.16

Performance ratios (%)
Return on average common equity                                            19.0               15.9              19.7
Return on average assets                                                   0.81               0.70              0.89
Net interest margin                                                        2.79               2.63              2.91
Cost:income ratio                                                          55.4               57.7              52.6
Other income:total income ratio                                            32.5               36.9              34.3

Credit information
Impaired loans                                                              243                225               282
Allowance for credit losses
- Balance at end of period                                                  326                311               331
- As a percentage of impaired loans                                         134%               138%              117%

- As a percentage of loans outstanding                                      133%              1.29%             1.45%

Average balances
Assets                                                                   35,587             35,750            33,741
Loans                                                                    23,960             23,658            22,047
Deposits                                                                 28,464             28,595            26,712
Common equity                                                             1,510              1,553             1,532

Capital ratios (%)
Tier 1                                                                      7.9                8.4               8.7
Total capital                                                              10.8               11.4              11.4

Total assets under administration (^)
Funds under management                                                   11,528             11,888            10,090
Custodial accounts                                                        3,285              3,208             2,916
Total assets under administration                                        14,813             15,096            13,006


(^) Amounts as at 31 March 2002 have been restated to eliminate inter-company 
holdings of assets.




Consolidated Statement of Income (Unaudited)
                                                                                        Quarter ended
Figures in C$ millions                                                      31Mar03           31Dec02          31Mar02
(except per share amounts)

Interest and dividend income
Loans                                                                           333               331              299
Securities                                                                       28                29               27
Deposits with regulated
financial institutions                                                           13                17               18
Total interest income                                                           374               377              344

Interest expense
Deposits                                                                        147               158              125
Debentures                                                                        9                 9                8
Total interest expense                                                          156               167              133

Net interest income                                                             218               210              211

Provision for credit losses                                                      20                25               25
Net interest income after
provision for credit losses                                                     198               185              186

Other income
Deposit and payment service charges                                              20                20               17
Credit fees                                                                      16                14               15
Capital market fees                                                              16                19               20
Mutual fund and administration fees                                              13                13               15
Foreign exchange                                                                 14                13               12
Trade finance                                                                     6                 7                6
Trading revenue                                                                   3                 4                2
Securitization income                                                             5                 2               12
Other                                                                            12                31               11
Total other income                                                              105               123              110

Net interest and other income                                                   303               308              296

Non-interest expenses
Salaries and employee benefits                                                   87                85               85
Premises and equipment                                                           29                29               28
Other                                                                            63                75               56
Restructuring costs                                                               -                 2                -

Total non-interest expenses                                                     179               191              169

Income before taxes and non-
controlling interest in income of trust                                         124               117              127
Provision for income taxes                                                       47                48               47
Non-controlling interest in income
of trust                                                                          4                 4                4

Net income                                                                       73                65               76
Preferred share dividends                                                         2                 2                2

Net income attributable to
common shares                                                                    71                63               74
Average common shares outstanding (000's)                                   471,168           466,114          456,168

Basic earnings per share ($)                                                   0.15              0.14             0.16





Condensed Consolidated Balance Sheet (Unaudited)
                                                               At 31Mar03              At 31Dec02          At 31Mar02

Figures in C$ millions

Assets
Cash and deposits with Bank of Canada                                 273                     417                 352
Deposits with regulated financial institutions                      3,485                   3,317               3,206
                                                                    3,758                   3,734               3,558

Investment securities                                               2,607                   2,875               2,375
Trading securities                                                    642                     870               1,031
                                                                    3,249                   3,745               3,406

Assets purchased under
reverse repurchase agreements                                         577                     416                 351

Loans
                                                                   
    Businesses and government                                      12,091                  11,949              11,959
                                                                    
    Residential mortgage                                            9,946                   9,809               8,766
                                                                    
    Consumer                                                        2,493                   2,422               2,181
                                                                     
    Allowance for credit losses                                      (326)                   (311)               (331)

                                                                   24,204                  23,869              22,575

Customers' liability under acceptances                              2,779                   2,374               2,560
Land, buildings and equipment                                         111                     111                 118
Other assets                                                          721                     940               1,282
                                                                    3,611                   3,425               3,960
Total assets                                                       35,399                  35,189              33,850

Liabilities and shareholders' equity
Deposits
                                                                      
    Regulated financial institutions                                  827                     758               1,748
                                                                   
    Individuals                                                    14,318                  14,432              13,530
                                                                   
    Businesses and governments                                     13,231                  13,182              11,683

                                                                   28,376                  28,372              26,961

Subordinated debentures                                               519                     528                 447

Acceptances                                                         2,779                   2,374               2,560
Assets sold under repurchase agreements                                80                      28                  46
Other liabilities                                                   1,821                   1,984               1,907
Non-controlling interest in trust and subsidiary                      230                     230                 230
                                                                    4,910                   4,616               4,743
Shareholders' equity
    Preferred shares                                                  125                     125                 125

    Common shares                                                     950                     950                 935
                                                                      
    Contributed surplus                                               165                     165                 165

    Retained earnings                                                 354                     433                 474

                                                                    1,594                   1,673               1,699

Total liabilities and shareholders' equity                         35,399                  35,189              33,850





Condensed Consolidated Statement of Cash Flows (Unaudited)

                                                                                     Quarter ended
Figures in C$ millions                                                   31Mar03           31Dec02           31Mar02

Cash flows provided by/(used in):
Operating activities                                                         375               245                95

Financing activities                                                         (96)              272               291

Investing activities                                                        (319)              (54)             (929)

Increase/(decrease) in cash and
cash equivalents                                                             (40)              463              (543)
Cash and cash equivalents,
beginning of period                                                        3,637             3,174             3,138
Cash and cash equivalents,
end of period                                                              3,597             3,637             2,595

Represented by:
Cash resources per balance sheet                                           3,758             3,734             3,558
less non-operating deposits (^)                                             (161)              (97)             (963)
Cash and cash equivalents,
end of period                                                              3,597             3,637             2,595


(^) 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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