HSBC Trinkaus 1Q 2007 Results

HSBC Holdings PLC
15 May 2007

                            HSBC TRINKAUS & BURKHARDT
                            FIRST QUARTER 2007 RESULTS

• Profit after tax up 29.3 per cent to €41.5 million.
• Net interest income up 33.1 per cent to €20.5 million.
• Net fees and commissions up 22.4 per cent to €89.2 million.
• Cost:income ratio improved to 57.2 per cent.

HSBC Trinkaus & Burkhardt first quarter 2007 results were up strongly compared
to the first quarter of 2006. Operating profit increased 17.8 per cent, from
€52.2 million to €61.5 million compared to the first three months of last year.
Profit after tax was up 29.3 per cent from €32.1 million to €41.5 million
compared to the first quarter of 2006.

All business segments increased their earnings contributions significantly
year-on-year. The institutional client business made the largest earnings 
contribution, driven by performance in the fixed income and asset management 
products businesses. The private banking business increased its earnings 
contribution significantly due to the net inflow of customer assets under 
management and the associated expansion of the securities business. The 
corporate banking business benefited from strong growth in the deposits business
as well as from improving M&A and IPO business activity. The trading segment saw
performance improve in money market and foreign exchange trading and also in the
equities and equity derivatives business.

Net interest income was up 33.1 per cent from €15.4 million to €20.5 million
compared to first quarter 2006, driven by growth in both deposit volumes and
loans and advances to customers.
                                                                           
Net provisioning recoveries of €0.4 million were primarily due to a reduction in
loan impairment charges, as historical default rates in the lending business 
declined further. The bank continues to be cautious in the assessment of new loan
commitments, and is focused on effective risk management with respect to
existing lending relationships, against the backdrop of a favourable credit
environment.

The bank recorded a strong increase in net fees and commissions, the bank's most
important profit contributor, up 22.4 per cent from €72.9 million in the first
quarter of 2006 to €89.2 million. Net fees and commissions from the securities
business provided the highest contribution driven by higher income from customer
transactions. The contribution from the issuing and structuring business 
increased significantly due mainly to the successful placement of a structured 
participatory rights issue on behalf of H.E.A.T Mezzanine 2007.

Trading profit increased 2.2 per cent in the first three months of 2007 from
€36.7 million to €37.5 million compared to the first quarter 2006. The equities
and equity/index derivatives business remains the largest earnings component and
continued to make a substantial earnings contribution with the issue of retail
products under the HSBC Trinkaus Investment Products brand (www.hsbc-tip.de).
The interest-related trading segments reported a slight increase in profits
while the contribution from foreign currency trading was more than double the
prior year comparable quarter result.

Administrative expenses were up 18.6 per cent to €88.6 million compared with the
first quarter 2006, primarily due to the increase in both the number of employees 
and higher performance-related remuneration. The rise in other administrative 
expenses is the result, among other things, of higher fees for consultancy 
services in the IT segment.

The cost:income ratio improved to 57.2 per cent compared with 57.5 per cent in
the first quarter the previous year, well below the upper limit of the 65 to 70 
per cent target set by the bank.

The Management Board is optimistic for 2007 as the further development of our
customer businesses is steadily broadening the revenue base. The strong
contribution from net fees and commissions remains highly dependent on capital
markets performance. In addition, the base level for the current financial year
is very high as a result of the successes in recent years in which double-digit
growth rates in the operating result were generated. Nevertheless, the
Management Board is pursuing the goal of increasing operating profit in 2007.





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