HSBC Subsid 9 Mths 02 Results

HSBC Holdings PLC
07 November 2002



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


             HSBC TRINKAUS & BURKHARDT RESULTS TO 30 SEPTEMBER 2002

HSBC Trinkaus & Burkhardt, Dusseldorf, which is approximately 73.5 per cent
indirectly owned by HSBC Holdings plc, improved its position in client business
during the first nine months of 2002. Corporate banking profits increased
strongly by 20.4 per cent compared to 2001. In the institutional investor client
segment, more sensitive to the condition of financial markets, results nearly
reached those of the previous year. Profits from private banking, against the
background of sharply reduced stock exchange turnover, fell by just 15 per cent
compared to 2001. Total profits from client business increased by 2.6 per cent.

Despite robust profit performance in its client business, the bank was unable to
escape the effects of falling stock exchanges or of the persistently weak German
economy. Operating profits after loan loss provisions were EUR 35.4 million, 43
per cent below the comparative period in the previous year.

Due to continued poor stock market conditions, the bank's proprietary trading
activities suffered a substantial setback. Nine-month trading profits of EUR 5.4
million were considerably below the EUR 39.5 million earned in 2001. Trading in
equities and equities- or index-based derivatives recorded a loss of EUR 0.7
million as a result of the fall in share indices. Fixed income and interest rate
derivatives trading, with profits of EUR 3.5 million, managed no significant
improvement on their level at the half-year 2002. Foreign exchange trading
profits of EUR 2.6 million were in line with expectations.

Net commission income increased by 3.4 per cent in the first nine months, to EUR
144.3 million. In the context of current market conditions, and given the high
dependency of the bank's revenues on securities business, this was a
considerable achievement.

Net interest income fell by 8.1 per cent to EUR 54.2 million in comparison to
2001. Thanks to risk-averse management of the bank's activities, total
provisions for losses on loans and advances increased only moderately to EUR 1.4
million, even though the German economy is heading this year for a record level
of corporate insolvencies. The bank's credit policy continues to be
characterised by conservatism and strict standards of assessment.

The cost-income ratio was 81.8 per cent at 30 September 2002, compared to 59.1
per cent for the same period in 2001. HSBC Trinkaus & Burkhardt has implemented
a wide range of measures to reduce costs. These led to a drop in total
administrative expenses of 5 per cent to EUR 169.4 million. The coming months
will require further steps to bring capacity into line with lower levels of
revenue.

The bank reported pre-tax profits of EUR 36.4 million for the first nine months
of 2002. Net profits after tax fell by 75.3 per cent to EUR 23.6 million,
although it should be noted that the profits of the comparative period in 2001
included exceptional income from the tax-efficient exchange of Ergo shares as
well as from the de-consolidation of S Broker AG (formerly pulsiv AG).

Earnings per share fell in the first nine months to EUR 0.91 per share compared
to EUR 1.39 per share in 2001 (adjusted for exceptional items). At 30 September
2002, consolidated assets of EUR 12.56 billion were 14.2 per cent higher than at
year-end 2001. The total capital base at 30 September 2002, calculated according
to BIS standards, represented 10.3 per cent of risk-weighted assets, and the
tier one capital ratio at the same date was 6.9 per cent.

Looking ahead, the Managing Partners anticipate that the last quarter of the
year will also be characterised by weak economic conditions and great
uncertainty on financial markets. However, the successes achieved this year in
corporate banking amply demonstrate that in a difficult environment the bank can
build a strong position with its clearly-defined strategy, its highly-qualified
staff and its solid capitalisation. This capability holds the promise of further
successful growth in client business. Continuing strict cost management will
lead to a further reduction in administrative expenses, without jeopardising
revenue-earning potential. However, the Managing Partners do not expect a
significant improvement in the cost-income ratio before next year.


                      This information is provided by RNS
            The company news service from the London Stock Exchange