HSBC subsid 1Q03 results

HSBC Holdings PLC
08 May 2003


The following text is the English translation of a news release issued in
Germany by HSBC Holdings plc's subsidiary.



              HSBC TRINKAUS & BURKHARDT FIRST QUARTER 2003 RESULTS

                      Operating profits up by 25 per cent

HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly owned
by HSBC Holdings plc, reported improved profits for the first quarter of 2003,
despite poor economic conditions in Germany, the high number of corporate
insolvencies and weak sentiment in financial markets.

The bank increased operating profits by 25 per cent compared with the same
period of the previous year, from EUR 14.4 million to EUR 18.0 million, mainly
due to four factors:

First, trading profits rose strongly from EUR 2.1 million to EUR 9.2 million.
Both interest rate and equities trading activities contributed to this
improvement, while foreign exchange trading recorded a small loss. The increase
in trading profits exceeded expectations, having been achieved under difficult
market conditions.

Secondly, client business was robust. The Corporate Banking and Institutional
Investors businesses increased their contribution to profits. Private Banking,
though, could not escape the unfavourable environment. Overall, net income from
fees and commissions declined by 2.7 per cent to EUR 47.3 million, while net
interest income fell 4.8 per cent, to EUR 17.7 million.

Thirdly, administrative expenses were stable. The cost reduction measures
introduced in 2002 were increasingly effective across all cost categories and
will be rigourously pursued. However, higher non-salary employment costs and
profit-related remuneration led to a slight increase in administrative expenses
of 0.9 per cent, to EUR 56.0 million.

Finally, the charge for credit risk provisions remained low, with net new
provisions of EUR 1.1 million in the first three months of 2003 being
approximately one quarter of 2002 full year provisions, despite unaltered strict
provisioning criteria. In the context of the continuing high rate of corporate
failures in Germany, this once again demonstrates the merits of the bank's
consistent and prudent credit risk management policy.

Consolidated assets increased in comparison with the year-end 2002 by 8.7 per
cent to EUR 12.1 billion. The total capital base at 31 March 2003 was 11.3 per
cent of risk-weighted assets according to BIS rules. The core capital ratio was
7.6 per cent.

The Managing Partners, in their outlook for the rest of the year, draw attention
to the uncertainties hanging over future economic developments. There is no sign
of a convincing recovery in the global economy and only very modest growth is
predicted for the USA and Europe.

Nevertheless, the Managing Partners view the year ahead with cautious optimism.
They anticipate operating profits increasing by double percentage figures, so
long as equities markets recover at the latest in the second half of the year
and credit risk provisions do not materially exceed those of 2002. If the bank
is successful in achieving its profit target, then in line with its policy of
linking dividends to profits, the shareholders too will share in those profits.
In the first quarter of 2003, the foundation was laid to achieve the profit
target.


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