HSBC Canada 1st Qtr Results

HSBC Hldgs PLC
30 May 2000

                      HSBC BANK CANADA
           FIRST QUARTER 2000 RESULTS - HIGHLIGHTS


*    Consolidated net income was C$47 million for the quarter
     ended 31 March 2000, an increase of 23.7 per cent over
     the comparative quarter in 1999.

*    Return on common equity was 18.9 per cent for the three
     months ended 31 March 2000.

*    Total assets of C$26.4 billion at 31 March 2000.

*    Total capital ratio of 10.6 per cent, tier1 capital
     ratio of 7.7 per cent at 31 March 2000.

*    Funds under administration of C$13.8 billion at 31 March
     2000.


HSBC Bank Canada reports net income of C$47 million

Net income for the three months ended 31 March 2000 was C$47
million, a 23.7 per cent increase over the same period in
1999. The redemption of C$270 million of subordinated
debentures and the issue of C$270 million of non-cumulative
preferred shares increased net income by approximately C$2
million.

Net interest income for the three months ended 31 March 2000
was C$152 million, 14.3 per cent higher than the same period
in 1999. This improvement resulted primarily from increases
in prime and base rates, a continued focus on loan pricing
and a strong contribution from loan fees included in interest
income. In addition, approximately C$4 million of the
increase was due to the redemption of C$270 million of
subordinated debentures.

The provision for credit losses for the three months ended 31
March 2000 was reduced by C$5 million compared to the first
quarter of 1999 as a result of stable credit quality
requiring lower general and specific provisions.

Other income of C$125 million for the three months ended 31
March 2000 was 34.4 per cent higher than the same period in
1999. Other income as a percentage of the total of net
interest and other income was 45.1 per cent for the three
months ended 31 March 2000, compared to 41.2 per cent for the
same period in 1999. This strong performance resulted
primarily from volatile but improved equity markets during
the three months ended 31 March 2000. Brokerage commissions
increased sharply, with both full service and discount
brokerage reporting increases of over 120 per cent in retail
commissions over the same period in 1999.

The increase in other income was also enhanced by corporate
finance revenues. Strong net sales, particularly of core
equity funds and market appreciation of mutual fund assets
helped increase mutual funds under management during the
quarter by C$226 million and increased fee revenue. These
increases were offset by unfavourable treasury trading
conditions and lower securitisation income.

Non-interest expenses increased to C$191 million in the three
months ended 31 March 2000, an increase of 22.4 per cent over
the same period in 1999. This increase was primarily due to
growth in performance-based compensation. Other factors
affecting non-interest expenses included an adjustment
arising from the Gordon Capital Corporation acquisition in
1999 and an increase in securities volume related expenses
such as brokerage transactions and service and settlement
costs. The efficiency ratio for the three months ended 31
March 2000 was 69.0 per cent, the same as the three months
ended 31 March 1999.

The provision for income taxes increased to C$28 million for
the three months ended 31 March 2000 from C$16 million for
the same period in 1999.  This resulted from higher net
income before taxes, a higher effective tax rate and
recording the effects on future income tax assets of a
decrease of 1 per cent in the federal statutory tax rate
effective 1 January 2001.

HSBC Bank Canada's assets grew by C$1.3 billion during the
three months ended 31 March 2000. The increase was primarily
due to an increase in commercial deposits which were invested
in inter-bank placements. Liquidity and capital ratios were
strong at 31 March 2000 with the liquid assets to deposits
ratio of 27.3 per cent, tier 1 capital ratio of 7.7 per cent
and total capital ratio of 10.6 per cent.

Funds under administration grew to C$13.8 billion at 31 March
2000, an increase of 6.4 per cent from the December 1999 year
end. The increase in funds under administration contributed
to the growth in other income.

HSBC Bank Canada's Year 2000 initiative was successful and
the millennium rollover passed without incident. All Year
2000 activities are considered to be complete.

The results and assets above do not include the effect of the
acquisition of Republic National Bank of New York (Canada)
('Republic Canada') which was completed effective 1 April
2000. The total assets of Republic Canada at 31 March 2000
were approximately C$1.3 billion.

HSBC Bank Canada also announced today in a separate news
release the filing of two preliminary prospectuses in
connection with the offering of preferred shares and asset
trust securities.

Martin Glynn, President and Chief Executive Officer, said:
'Results for the quarter were in line with expectations. We 
continue to make solid progress in consolidating our branch
support services to free resources for deepening our client
relationships.

'Looking ahead, the integration of Republic Canada will
expand the bank's presence in Ontario and Quebec and enable
us to capitalise on many cross-selling activities. In
addition, Republic Canada's commercial loan portfolio will
allow us to expand our presence into some market segments
where HSBC did not previously have sizeable relationships.'

HSBC Bank Canada, an indirectly-held, wholly-owned subsidiary
of HSBC Holdings plc, has more than 140 offices. With over
5,000 offices in 80 countries and territories and assets of
US$569 billion at 31 December 1999, the HSBC Group is one of
the world's largest banking and financial services
organisations.


HSBC Bank Canada                                                 Highlights


                                           Three months ended
                                    31 March   31 December   31 March
                                        2000          1999       1999
Earnings
(C$ millions except per share amounts)
Net interest income                      152           141        133 
Net income                                47            42         38 
Net income per common share             0.17          0.15       0.14 

Financial ratios (%)
Return on average common equity        18.92         17.32      18.41 
Return on average assets                0.72          0.64       0.60 
Net interest margin                     2.64          2.41       2.36 
Efficiency ratio                        69.0          69.9       69.0 
Provision for credit losses/average
  loans and acceptances                 0.23          0.15       0.34 
Other income/total income               45.1          40.0       41.2 

Financial position (C$ millions)
Total assets                          26,360        25,051     26,429 
Total loans                           17,491        17,130     17,724 
Total deposits                        21,152        20,170     21,245 
Shareholder's equity                   1,295         1,252        855 
Funds under administration            13,842        13,013      9,988 

Capital ratios(%)
Total capital                           10.6          10.9        9.7 
Tier 1 capital                           7.7           7.9        5.3 


HSBC Bank Canada                    Net Income By Business Line(Unaudited)


                  Personal Commercial    Corporate & 
Figures in       financial  financial  institutional  Treasury
C$ millions       services   services        banking & markets  Other  Total 

Three months ended
31 March 2000

Net interest
  income                71         67             7          7      -     152
Provision for
  credit losses         (3)        (7)           (1)         -      -     (11)
Other income            58         43             3         21      -     125
Non-interest
  expenses             (94)       (68)           (2)       (17)   (10)   (191)
Income before
  provision for
  income taxes          32         35             7         11    (10)     75
Provision for
  income taxes         (12)       (13)           (3)        (4)    4      (28)
Net income              20         22             4          7    (6)      47

Average assets       8,714      9,635         2,032      5,814     -   26,195

Three months ended
31 March 1999

Net interest
  income                56         63             6          8     -      133
Provision for
  credit losses         (3)       (12)           (1)        -      -      (16)
Other income            40         31             3        19      -       93
Non-interest
  expenses             (76)       (57)           (2)      (11)   (10)    (156)
Income before
 provision for
 income taxes           17         25             6        16    (10)      54
Provision for
  income taxes          (5)        (7)           (2)       (5)     3      (16)
Net income              12         18             4        11     (7)      38


Average assets       8,969      9,401         2,026     5,498      -   25,894


HSBC Bank Canada               Consolidated Statement of Income(Unaudited)


                                               Three months ended
                                        31 March    31 December    31 March 
Figures in C$ millions                      2000           1999        1999 

Interest and dividend income
Loans                                        304            293         296 
Lease financing                                7              7           7 
Securities                                    36             38          48 
Deposits with regulated financial
  institutions                                41             38          24 
Total interest income                        388            376         375 

Interest expense
Deposits                                    (229)         (225)        (232)
Debentures                                    (7)          (10)         (10)
Total interest expense                      (236)         (235)        (242)

Net interest income                          152           141          133 

Provision for credit losses                  (11)           (7)         (16)
Net interest income after provision
  for credit losses                          141           134          117 

Other income
Investment and securities services            68            41           34 
Deposit and payment services                  13            13           12 
Lending fees                                   4             4            5 
Bankers' acceptance, letter of
  credit and guarantee fees                   12            12           11 
Trading revenue                               17            15           20 
Other                                         11            10           11 
Total other income                           125            95           93 

Net interest and other income                266           229          210 

Non-interest expenses
Salaries and employee benefits              (101)          (88)         (81)
Premises and equipment                       (28)          (24)         (26)
Other                                        (62)          (53)         (49)
Total non-interest expenses                 (191)         (165)        (156)

Income before provision for income taxes      75            64           54 
Provision for income taxes                   (28)          (22)         (16)
Net income                                    47            42           38

Net income per common share                 0.17          0.15         0.14

See notes to consolidated financial statements.


HSBC Bank Canada                    Consolidated Balance Sheet (Unaudited)


                                 At 31 March   At 31 December   At 31 March
Figures in C$ millions                  2000             1999          1999

ASSETS

Cash and deposits with Bank of
Canada                                   235              341           170

Deposits with regulated financial
institutions                           2,512            1,954         1,449
                                       2,747            2,295         1,619
Investment securities                  2,612            2,437         3,334
Trading securities                       363              410           520
                                       2,975            2,847         3,854
Assets purchased under reverse
  repurchase agreements                  454              378           266

Loans:
  Businesses and government            9,780            9,634         9,721
  Residential mortgage                 5,853            5,769         6,368
  Consumer                             2,147            2,014         1,933
  Allowance for credit losses           (289)            (287)         (298)
                                      17,491           17,130        17,724

Customers' liability under
  acceptances                          1,832            1,705         1,768 
Land, buildings and equipment            122              124           114 
Other assets                             739              572         1,084 
                                       2,693            2,401         2,966 

Total assets                          26,360           25,051        26,429 

LIABILITIES AND SHAREHOLDER'S EQUITY

Deposits:
  Regulated financial institutions     1,150            1,303         1,945 
  Individuals                         11,188           10,858        10,345 
  Businesses and governments           8,814            8,009         8,955 
                                      21,152           20,170        21,245 

Acceptances                            1,832            1,705         1,768 
Assets sold under repurchase
  agreements                             145              179            86 
Other liabilities                      1,513            1,323         1,827 
Subordinated debt                        393              392           618 
Non-controlling interest in subsidiary    30               30            30 
                                       3,913            3,629         4,329 
Shareholder's equity:
  Preferred shares                       270              270             - 
  Common shares                           75               75            75 
  Contributed surplus                    165              165           165 
  Retained earnings                      785              742           615 
                                       1,295            1,252           855 
Total liabilities and
  shareholder's equity                26,360           25,051        26,429 

See notes to consolidated financial statements.


HSBC Bank Canada                         Consolidated Statement of Changes
                                          Shareholder's Equity (Unaudited)


                                                 Quarter ended     
 Figures in C$ millions (except             31 March       31 March 
   share amounts)                               2000           1999 

Preferred shares
 Balance at beginning and end of period          270              - 

Common shares
 Balance at beginning and end of period           75             75 

Contributed surplus
 Balance at beginning and end of period          165            165 

Retained earnings
 Balance at beginning of period                  742            577 
 Adoption of new accounting standard              (4)             - 
 As restated                                     738            577 
 Net income for the period                        47             38 
 Balance at end of period                        785            615 

Total shareholder's equity                     1,295            855 

Number of shares outstanding
 Preferred                                10,800,000              - 
 Common                                  280,168,000    280,168,000

See notes to consolidated financial statements.


HSBC Bank Canada                                    Condensed Consolidated
                                       Statement of Cash Flows (Unaudited)


                                                 Quarter ended   
                                            31 March       31 March 
Figures in C$ millions                          2000           1999 

Cash flows from (used in) operating activities
 Net income                                       47             38
 Trading securities                               47           (195)
 Other items                                      39             84
                                                 133            (73)

Cash flows from (used in) financing activities
 Net increase in deposits                        982            695
 Assets sold under repurchase agreements         (34)          (227)
                                                 948            468

Cash flows from (used in) investing activities
 Loans, excluding securitisations               (388)          (323)
 Proceeds from loans securitised                  16             43
 Investment securities                          (175)          (211)
 Assets purchased under reverse
   repurchase Agreements                         (76)           153 
 Businesses acquired, net of cash
   and cash equivalents at date of acquisition     -            (66)
 Net (increase) decrease in
   deposits with other banks,
   non-operating                                 118           (116)
 Net (increase) in land, building and
   equipment                                      (6)            (9)
                                                 (511)         (529)

 Increase (decrease) in cash and cash
   equivalents                                    570          (134)
 Cash and cash equivalents, beginning
   of period                                    2,092         1,436 
 Cash and cash equivalents, end
   of period                                    2,662         1,302 

 See notes to consolidated financial statements.


HSBC Bank Canada    Notes to Consolidated Financial Statements (Unaudited)


1.   Accounting policies

The policies adopted in preparing these consolidated
financial statements are consistent with those described in
the Audited Financial Statements for the year ended 31
December 1999, except as described below. Certain comparative
amounts have been reclassified to conform with the current
period presentation.

Effective 1 January 2000, the Canadian Institute of Chartered
Accountants ('CICA') changed the accounting standards
relating to the accounting for income taxes and the
accounting for future employee benefits, including pension
and non-pension post retirement benefits.

a)   Income taxes

  CICA Section 3465 requires a change from the deferral
  method to the asset and liability method of accounting for
  income taxes. Under this new standard, future income tax
  assets and future income tax liabilities are determined
  based on temporary differences (differences between the
  tax basis and accounting basis of assets and liabilities)
  and are measured using the enacted or substantively
  enacted, tax rates expected to apply when the asset is
  realized or the liability is settled. A valuation
  allowance is recorded against any future tax asset if it
  is more likely than not that the asset will not be
  realized. Income tax expense or benefit is the sum of the
  provision for current income taxes and the difference
  between the opening and ending balances of the future
  income tax assets and liabilities.
  
  The accounting recommendations in Section 3465 were
  adopted on a retroactive basis, without restatement of any
  prior periods. The cumulative effect of this accounting
  policy change has been recorded at 1 January 2000 as a
  decrease in retained earnings of C$4 million, an increase
  in net future income tax assets of C$49 million (primarily
  related to the benefit of income tax losses carried
  forward recognized as it is more likely than not the asset
  will be realized) and an increase in deferred credits of
  C$53 million.
  
b)   Pension and other post-retirement benefits

  CICA Section 3461 requires costs of post-retirement
  benefit plans, other than pensions, to be accrued over the
  periods in which the employees render services. To comply
  with Section 3461, the calculation of the accrued pension
  benefit obligation relating to post-retirement benefits
  other than pensions is made using current settlement
  discount rates.
  
  The effect of the new standard on future benefits other
  than pensions required recognition of a transitional
  obligation as at 1 January 2000 amounting to C$38 million.
  As the bank has chosen to adopt this standard on a
  prospective basis, this transitional obligation is
  amortized as part of periodic post-retirement benefit
  costs over the estimated average remaining service life of
  the employees, which has been estimated at 20 years. The
  expense for employee future benefits for the three months
  ended 31 March 2000 is not materially different than it
  would have been under the previous standard.

  In estimating the financial position of the defined
  pension plans at 1 January 2000, a valuation allowance of
  C$47 million has been applied against the surplus of
  certain pension plans, in accordance with Section 3461.

2.   Supplementary Financial Information

Dividends on the preferred shares were not declared as at 31
March 2000 and 31 December 1999. Had a dividend been declared
on these dates, certain financial results and ratios would
have been as follows:
  

                                             Three months ended    
 Figures in C$ millions, except     31 March  31 December   31 March
   per share amounts                    2000         1999       1999

 Net income                               47           42         38
 Preferred share dividend if
   dividend had been declared              5            1          - 
 Net income, after giving effect to
   preferred share dividend if 
   dividend had been declared             42           41         38

 Basic income per common share          0.15         0.15       0.14 
                                                               
 Shareholder's equity                  1,290        1,251       8.55 
 Return on average common equity       16.70%       17.06%     18.41%
 Return on average assets               0.64%        0.64%      0.60%


3.   Subsequent events

a)   Acquisition subsequent to 31 March 2000

  Effective 1 April 2000, the bank acquired all of the
  voting shares of Republic National Bank of New York
  (Canada) ('Republic Canada'). Republic Canada was acquired
  from HSBC Bank USA, a related company to the bank, on an
  arm's length basis using an independent third party as
  arbitrator of the purchase price. Immediately subsequent
  to the acquisition, Republic Canada was amalgamated with
  the bank.
  
  The acquisition was accounted for using the purchase
  method. Consideration for the purchase was paid in cash.
  The estimated fair value of net assets acquired consisted
  of:

   Figures in C$ millions

   Assets                                  1,252
   Liabilities                             1,160
   Net assets acquired                        92
   Goodwill                                   32
   Cash consideration                        124

b)   Reorganisation of share capital

  The bank reorganised its share capital whereby Class 1
  Preferred Shares Series A, Class 1 Preferred Shares Series
  B and Class 1 Preferred Shares Series Z were created and
  existing Preferred Shares Series 1 were redesignated as
  Class 2 Preferred Shares Series A. After the
  reorganisation the authorized share capital consisted of
  933,677,000 common shares without par value, an unlimited
  number of Class 1 Preferred Shares without par value and
  an unlimited number of Class 2 Preferred Shares without
  par value.

c)   Prospectus for issue and sale of preferred shares

  The bank has filed, with various Canadian provincial and
  territorial securities commissions, a prospectus regarding
  the sale and issue of Non-cumulative Redeemable Class 1 
  Preferred Shares Series A. The bank is planning to use the
  net proceeds to be received on closing to redeem the 
  outstanding Class 2 Preferred Shares Series A.

d)   Creation of HSBC Canada Asset Trust

  HSBC Canada Asset Trust (the Trust) was formed on 25 May
  2000 as a closed end trust, established under the laws of
  British Columbia, by HSBC Trust Company (Canada) (as
  Trustee), a subsidiary of the bank. The bank will
  subscribe for voting Special Trust Securities. The Trust
  has also filed a prospectus with various Canadian provincial
  and territorial securities commissions regarding the sale 
  and issue of HSBC Canada Asset Trust Securities - Series 2010
  (HSBC HaTS).

The Trust is planning to use the aggregate estimated net
proceeds in connection with both the offering and the
subscription by the bank for the Special Trust Securities to
purchase National Housing Act (NHA) mortgages on a fully
serviced basis from the bank.