HSBC Subsidiary Results

HSBC Holdings PLC
9 August 2001

                HSBC TRINKAUS & BURKHARDT 2001 INTERIM RESULTS

                      PROFITS LIFTED BY EXCEPTIONAL ITEM

HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly
owned by HSBC Holdings plc, achieved an increase in profit from normal
business activities of 25.7 per cent to EUR102.6 million in the first half of
2001.

This was due to a large exceptional profit on disposal of shares in ERGO
Versicherungsgruppe AG, a disposal which was favourably structured for tax
purposes. Through the resulting reduction in the corporate income tax rate,
taxes on profits were cut by half to EUR19.4 million. Profit after tax and
minority interests of EUR79.6 million was consequently 82.6 per cent higher
than at the interim stage in 2000.

Earnings per share rose from EUR1.67 in 2000 to EUR3.05 in 2001. Pre-tax
return on equity rose to 35.2 per cent, from 25.2 per cent in the previous
year.

The weakness of stock markets in the first half of 2001 led to a reduction in
operating profits of 39.7 per cent to EUR47.3 million. This must be seen,
however, in the context of an exceptionally high comparative figure for the
first half of 2000. Indeed, the first quarter of 2000 in particular brought
the bank record operating profits.

Net commissions, the most significant profit element of the bank, suffered
especially from weakness in the markets. Customer caution in securities
dealings as well as in new issues business reduced net commissions by 20 per
cent, to EUR96.5 million. Despite a marked decline, commission on securities
transactions remained by far the most important component of net commissions.

Net interest income increased by 6.3 per cent to EUR40.2 million. Without any
relaxation of strict criteria, new credit risk provisions were reduced from
EUR1.5 million to EUR0.3 million. Net interest income after provisions
increased by 9.9 per cent to EUR39.9 million.

Profits from trading activities fell by 8.1 per cent to EUR33.9 million.
Considering developments on stock markets, profits from equities and equities
derivatives trading of EUR24.1 million were satisfactory. Bond and interest
rate derivatives trading profit of EUR4.0 million comfortably exceeded the
level of the previous year, though continuing to fall short of expectations.
Foreign exchange dealing profits at EUR5.8 million were lower than in the
first half of 2000.

Operating costs increased by a moderate 5.3 per cent to EUR122.6 million. The
number of staff employed increased to 1,506 by 30 June 2001, 109 more than a
year previously. The cost-income ratio from normal business activities
improved from 58.3 per cent to 54.3 per cent.

All business areas of the bank were adversely affected by the unfavourable
conditions on securities markets. In particular private banking, institutional
investors and own-account trading reported markedly lower results. In
contrast, corporate banking was able to maintain its performance at nearly the
level of the previous year.

Consolidated assets increased in comparison to 31 December 2000 by 13.3 per
cent to EUR11.7 billion. In particular, claims on and liabilities to financial
institutions rose. Capital resources increased from EUR653.4 million to
EUR674.5 million. The BIS total capital ratio was 11.3 per cent, and the core
capital ratio 7.1 per cent.

Looking ahead, the managing partners note that profitability in the second
half-year will as in the first be very strongly influenced by developments on
the international financial markets. They anticipate that, by virtue of the
large exceptional profit on disposal of shares in ERGO Versicherungsgruppe AG
booked in the first half, a satisfactory result is achievable for the full
year 2001, such that the dividend can be maintained at least at the level of
the previous year.