HSBC USA Inc 06 10-K Pt 3/10

HSBC Holdings PLC
05 March 2007



                                                                      Exhibit 12

                                  HSBC USA Inc.
              Computation of Ratio of Earnings to Fixed Charges and
        Earnings to Combined Fixed Charges and Preferred Stock Dividends
                          (in millions, except ratios)



----------------------------------------------------------------------------------------------------------------
Year Ended December 31                                          2006       2005       2004       2003       2002
----------------------------------------------------------------------------------------------------------------

Ratios excluding interest on deposits:
   Net income ...........................................   $  1,036   $    976   $  1,258   $    941   $    855
   Income tax expense ...................................        530        566        718        570        510
   Less: Undistributed equity earnings ..................         34         73         21          6          7
   Fixed charges:
      Interest on:
         Borrowed funds .................................        300        276        132         91        232
         Long-term debt .................................      1,457      1,019        380        206        225
      One third of rents, net of income from subleases ..         25         19         19         17         17
                                                            --------   --------   --------   --------   --------
   Total fixed charges, excluding interest on deposits ..      1,782      1,314        531        314        474

   Earnings before taxes and fixed charges,
      net of undistributed equity earnings ..............   $  3,314   $  2,783   $  2,486   $  1,819   $  1,832
                                                            ========   ========   ========   ========   ========

   Ratio of earnings to fixed charges ...................       1.86       2.12       4.68       5.79       3.86
                                                            ========   ========   ========   ========   ========

   Total preferred stock dividend factor (1) ............   $    133   $     71   $     36   $     36   $     37
                                                            --------   --------   --------   --------   --------
   Fixed charges, including the preferred stock
      dividend factor ...................................   $  1,915   $  1,385   $    567   $    350   $    511
                                                            ========   ========   ========   ========   ========

   Ratio of earnings to combined fixed charges and
      preferred stock dividends .........................       1.73       2.01       4.38       5.20       3.59
                                                            ========   ========   ========   ========   ========
Ratios including interest on deposits:

   Total fixed charges, excluding interest on deposits ..   $  1,782   $  1,314   $    531   $    314   $    474
   Add: Interest on deposits ............................      3,113      1,771        825        666        974
                                                            --------   --------   --------   --------   --------
   Total fixed charges, including interest on deposits ..   $  4,895   $  3,085   $  1,356   $    980   $  1,448
                                                            ========   ========   ========   ========   ========

   Earnings before taxes and fixed charges,
      net of undistributed equity earnings ..............   $  3,314   $  2,783   $  2,486   $  1,819   $  1,832
   Add: Interest on deposits ............................      3,113      1,771        825        666        974
                                                            --------   --------   --------   --------   --------
   Total ................................................   $  6,427   $  4,554   $  3,311   $  2,485   $  2,806
                                                            ========   ========   ========   ========   ========

   Ratio of earnings to fixed charges ...................       1.31       1.48       2.44       2.54       1.94
                                                            ========   ========   ========   ========   ========

   Fixed charges, including the preferred stock
      dividend factor ...................................   $  1,915   $  1,385   $    567   $    350   $    511
   Add: Interest on deposits ............................      3,113      1,771        825        666        974
                                                            --------   --------   --------   --------   --------
   Fixed charges, including the preferred stock
      dividend factor and interest on deposits ..........   $  5,028   $  3,156   $  1,392   $  1,016   $  1,485
                                                            ========   ========   ========   ========   ========

   Ratio of earnings to combined fixed charges and
      preferred stock dividends .........................       1.28       1.44       2.38       2.45       1.89
                                                            ========   ========   ========   ========   ========


(1)   Preferred stock dividends grossed up to their pretax equivalents.

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