HSBC Trinkaus 3Q2003 Results

HSBC Holdings PLC
06 November 2003

                         HSBC TRINKAUS & BURKHARDT KgaA

         Third quarter 2003 results - operating profits improve further

Although the German economy has not yet resumed a growth path, and the rate of
company insolvencies remains high, HSBC Trinkaus & Burkhardt KGaA, which is
indirectly 73.5 per cent owned by HSBC Holdings plc, reported substantially
higher profits for the first nine months of 2003 compared to the same period in
2002. Operating profits increased by 79.1 per cent from EUR 35.4 million to EUR
63.4 million. Net profit after tax rose by 40.7 per cent to EUR 33.2 million.
Earnings per share rose by 39.6 per cent to EUR 1.27 per share.

Four main factors contributed to this very pleasing development in the first
nine months of the year :

Excellent trading results : trading profits increased strongly from EUR 5.4
million to EUR 38.6 million. Both interest rate and equities trading
significantly exceeded expectations. However, foreign exchange trading could not
match its good performance of the same period in 2002.

A clear focus on target client groups and core competencies : concentration on
the needs of wealthy private clients, corporate customers and institutional
investors generated a balanced distribution of profits from client business.
Private Banking reported a pleasing improvement in profits compared to the prior
year, while Corporate Banking and Institutional Investors could not quite match
their performance of the same period in 2002.

Decisive cost control : the bank adjusted capacity responsively to the changing
business environment. This led to a fall in many categories of administrative
expense in the first nine months of the year, compared to 2002. Nevertheless,
total administrative expenses increased overall by 2.4 per cent to EUR 173.4
million. This rise, small in relation to the increase in profits, was mainly due
to higher profit-related remuneration and to the first-time depreciation of the
GEOS securities processing software that was implemented last year.

Prudent lending policy : unfavourable economic conditions continue to weigh
heavily on the credit standing of many companies. Despite the consistent
application of strict standards for provisioning, transfers to provisions for
lending risk in the first nine months of 2003 remained nearly stable compared
with the same period in 2002. However, against the background of the poor
economic conditions it was only possible in a few instances to reduce or release
existing provisions. Thanks to prudent credit risk management, the bank was
successful in holding net new lending provisions to the relatively low figure of
EUR 6.7 million.

Compared to 31 December 2002, total assets increased by 4 per cent to EUR 11.57
billion. The BIS capital ratio at 30 September 2003 was 11.4 per cent; the core
capital ratio was 8.1 per cent.

The Managing Partners do not expect the German economy to make a rapid or
thorough recovery in the remaining months of 2003. Nevertheless, they are
encouraged by the strong rise in the bank's revenues in the first nine months of
the year to be optimistic about the prospects for the fourth quarter.


Decisive factors for the bank's achievement of a successful full year's results
in 2003 will be firstly HSBC Trinkaus & Burkhardt's good competitive position in
the market, with a clear emphasis on close client relationships with wealthy
private clients, corporate clients and institutional investors. Also of
particular importance will be developments on capital markets, given the large
part played by securities transaction commissions and proprietary trading in the
bank's overall results. The third condition for success will be consistently
prudent credit risk management, protecting the bank from larger corporate
defaults.

Subject to these factors, the Managing Partners expect to increase operating
profits this year compared to 2002 by a two-digit percentage figure. The bank's
shareholders would then share in those higher profits, in line with its
results-oriented dividend policy.


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