HSBC USA Inc. 4th Quarter & Final Results

HSBC Hldgs PLC
9 February 2000

                               
                        HSBC USA INC.
                  1999 RESULTS - HIGHLIGHTS

* The purchase of Republic New York Corporation (Republic) by
  HSBC Holdings plc was completed on 31 December 1999. Republic
  was then merged with HSBC USA Inc.

* Full-year 1999 pre-tax profits, before one-off events^,
  increased 9.4 per cent to US$771 million.

* Full-year net income decreased by 12.0 per cent to US$464
  million as a result of moving to a fully-taxed basis and the
  overall adverse effect of one-off events^.

* The cost:income ratio for 1999 was 49.0 per cent, compared to
  48.0 per cent in 1998.

* Return on equity for the year was 20.2 per cent and 18.2 per
  cent for the fourth quarter.

* Fourth quarter 1999 pre-tax profits, before one-off events^,
  increased 17.6 per cent to US$201 million.

* Fourth quarter net income decreased by 28.2 per cent to
  US$114 million, including the one-off events^ and as a result
  of moving to the fully-taxed basis.


^One-off events 
 (figures in US$ millions):           Quarter       1999  1998
                                                            
Pre-tax one-off events, income:                             
Credit card portfolio sale            First quarter   -    $11
Student loan business sale            First quarter  $15    -
Credit card portfolio sale            Second quarter  -    $17
Brazilian tax credits                 Fourth quarter $13   $33
                                                            
Pre-tax one-off events, expense:                            
Merger-related restructuring charge   Fourth quarter $27    -
                                      

HSBC USA Inc.                                           Results

HSBC USA Inc. reports strong 1999 results

HSBC USA Inc. recorded full-year 1999 pre-tax profits, before
one-off events, of US$771 million, up 9.4 per cent from
US$704 million in 1998. Full-year net income was US$464
million compared to US$527 million for last year. The
decrease was the result of moving to a fully-taxed basis and
the overall adverse effect of one-off events.

For the fourth quarter of 1999, HSBC USA Inc. recorded pre-
tax profits, before one-off events, of US$201 million, up
17.6 per cent from US$171 million in the same period in 1998.
Net income for fourth quarter of 1999 was US$114 million
compared to US$159 million for 1998. As was the case for the
full year, the decrease was the result of moving to a fully-
taxed basis and the overall adverse effect of one-off events.

HSBC Holdings plc acquired Republic New York Corporation on
31 December 1999. Following the acquisition, Republic was
merged with HSBC USA Inc. Since the acquisition took place at
year-end, the income statements present the results of
operations of HSBC USA Inc. pre-merger and, in accordance
with US GAAP, do not give effect for year-end reporting to
any purchase accounting entries relating to the acquisition
of Republic, except for a US$27 million merger-related
restructuring charge. However, the balance sheet data has
been presented on a consolidated basis to include HSBC USA
Inc. and Republic information.

One-off events affecting fourth quarter net income include
the benefit of a US$13 million pre-tax settlement with the US
Internal Revenue Service and the cost of the US$27 million
merger-related restructuring charges. The settlement with the
US Internal Revenue Service was related to Brazilian tax
credits disallowed in the 1980s. In the first quarter of 1999,
pre-tax income benefited from a US$15 million gain on the
sale of a student loan business in California.

1999 full-year return on average common equity of 20.2 per
cent versus 24.9 per cent in 1998, reflects a higher tax
rate, the impact of one-time items and a larger capital base.

Total loans at 31 December 1999 were US$37.9 billion, up 58
per cent from US$24.0 billion at 31 December 1998, and total
assets were US$90.2 billion compared to US$33.9 billion, due
principally to the merger with Republic. Common equity as a
per cent of total assets increased to 10.6 per cent, compared
to 6.6 per cent last year, also reflecting the impact of the
Republic transaction.

Youssef Nasr, chief executive officer of HSBC USA Inc. said:
'1999 was a significant year for HSBC in the US. We have
completed one of the most important events in the bank's
history, the merger of Republic New York Corporation and its
principal subsidiary, Republic National Bank of New York,
with HSBC USA Inc. and HSBC Bank USA. I am delighted to
welcome former Republic clients to HSBC.

'Our combined organisation now has the largest branch network
in New York State and the second largest branch network in
the metropolitan New York City area. In terms of deposits, we
are the eleventh largest bank holding company in the US, and
the third largest in New York State. This increased presence
means our customers will have easier access to a more
extensive range of products, which we will continue to
deliver through superior customer service.'

HSBC USA Inc. is the New York-based bank holding company for
HSBC Bank USA and for the HSBC Group's interest in the Wells
Fargo HSBC Trade Bank. The bank has more than 450 branches in
New York, seven branches in Florida, three in California and
two in Pennsylvania. HSBC USA Inc. is an indirectly-held,
wholly-owned subsidiary of HSBC Holdings plc (NYSE: HBC),
which is headquartered in London. With over 5,000 offices in
82 countries and territories and assets of US$497 billion at
30 June 1999, the HSBC Group is one of the world's largest
banking and financial services organizations.


HSBC USA Inc.                                        Summary

                         Quarter ended  Quarter ended   Year ended  Year ended
Figures in US$ millions      31 Dec 99      31 Dec 98    31 Dec 99   31 Dec 98

Income before taxes               188           204          772           765
                                                                              
Income before taxes                                                           
  (excluding one-off                                                          
  events)^                        201           171          771           704
                                                                              
Net income                        114           159          464           527
                                                                           
Net operating profit after                                                    
  taxes adjusted for                                                          
  goodwill amortization           122           169          500           567
                                                                              
Profitability ratios (%)                                                      
Return on average assets          1.3           1.9          1.4           1.6
Return on average common
  equity                         18.2          29.1         20.2          24.9
Cost:income ratio                50.8          47.1         49.0          48.0

Staff numbers (full time equivalents)                     14,440 ^^      9,293
                                                                              
Average balances (US$m)                                                       
Loans                          23,543        22,064       23,384        21,392
Earning assets                 32,521        31,562       31,994        30,849
Total assets                   34,826        33,657       34,238        32,847
Deposits                       27,199        25,912       26,637        24,947
Common equity                   2,488         2,165        2,291         2,114
 
Net yields on a taxable equivalent basis (%)
Net yield on earning assets       3.7           3.7          3.8           3.8
Net yield on total assets         3.4           3.5          3.6           3.6
                                                                              
Capital (at end of period)                                                    
Common equity (US$m)                                       9,541         2,228
As a percentage of total assets (%)                         10.6           6.6
Capital ratios (%)                                                            
Leverage ratio                                              23.5           6.8
Tier I capital to risk-weighted assets                      13.5           8.6
Total capital to risk-weighted assets                       15.7          12.0


^One-off events (figures in US$ millions):  Quarter            1999  1998
                                                                 
Pre-tax one-off events, income:                                  
Credit card portfolio sale                  First quarter       -     $11
Student loan business sale                  First quarter       $15   -
Credit card portfolio sale                  Second quarter      -     $17
Brazilian tax credits                       Fourth quarter      $13   $33
                                                                 
Pre-tax one-off events, expense:                                 
Merger-related restructuring charge         Fourth quarter      $27  -
                                                                 
^^Full time staff equivalent numbers includes 5,403 staff of Republic
added at 31 December 1999

HSBC USA Inc.                            Consolidated statement of income

                                   Quarter ended     Quarter ended 
Figures in US$ thousands               31 Dec 99         31 Dec 98 
                                                                   
Interest income                                                    
Loans                                    461,817           449,478 
Securities                                51,471            61,114 
Trading assets                            14,803            12,560 
Deposits with banks                       26,891            47,686 
Federal funds sold and securities                                  
  purchased under resale agreements       33,727            12,079 
Total interest income                    588,709           582,917 
                                                                   
Interest expense                                                   
Deposits                                                           
- In domestic offices                    167,144           161,954 
- In foreign offices                      60,276            56,535 
Short-term borrowings                     28,528            45,666 
Long-term debt                            30,550            23,465 
Total interest expense                   286,498           287,620 
                                                                   
Net interest income                      302,211           295,297 
                                                                   
Provision for credit losses               22,500            21,000 
Net interest income, after provision                               
  for credit losses                      279,711           274,297 
                                                                   
Other operating income                                             
Trust income                              13,549            12,249 
Service charges                           35,684            30,152 
Mortgage servicing revenue                 4,379             7,725 
Other fees and commissions                44,624            38,048 
Trading revenues                           2,737            (1,845)
Interest on Brazilian tax settlement      13,143            32,700 
Other income                              11,248            11,013 
Total other operating income             125,364           130,042 
                                                                   
Total income from operations             405,075           404,339 
                                                                   
Other operating expenses                                           
Salaries and employee benefits           101,913           103,403 
Net occupancy expense                     21,635            22,478 
Other expenses                            93,595            74,329 
Total other operating expenses           217,143           200,210 
                                                                   
Income before taxes                      187,932           204,129 
Applicable income tax expense             74,050            45,500 
                                                                   
Net income                               113,882           158,629 


                                      Year ended       Year ended
Figures in US$ thousands               31 Dec 99        31 Dec 98

Interest income                                                    
Loans                                  1,841,396         1,785,122 
Securities                               214,480           232,440 
Trading assets                            50,627            50,843 
Deposits with banks                       97,012           136,594 
Federal funds sold and securities                                  
  purchased under resale agreements      116,524           127,982 
Total interest income                  2,320,039         2,332,981 
                                                                   
Interest expense                                                   
Deposits                                                           
- In domestic offices                    636,858           656,361 
- In foreign offices                     216,017           211,030 
Short-term borrowings                    129,604           204,171 
Long-term debt                           111,654            96,079 
Total interest expense                 1,094,133         1,167,641 
                                                                   
Net interest income                    1,225,906         1,165,340 
                                                                   
Provision for credit losses               90,000            80,000 
Net interest income, after provision                               
  for credit losses                    1,135,906         1,085,340 
                                                                   
Other operating income                                             
Trust income                              52,212            47,290 
Service charges                          128,598           115,382 
Mortgage servicing revenue                30,455            43,153 
Other fees and commissions               167,595           145,505 
Trading revenues                          10,014             3,700 
Interest on Brazilian tax settlement      13,143            32,700 
Other income                              61,952            72,367 
Total other operating income             463,969           460,097 
                                                                   
Total income from operations           1,599,875         1,545,437 
                                                                   
Other operating expenses                                           
Salaries and employee benefits           421,334           410,323 
Net occupancy expense                     88,950            89,423 
Other expenses                           317,579           280,524 
Total other operating expenses           827,863           780,270 
                                                                   
Income before taxes                      772,012           765,167 
Applicable income tax expense            308,300           238,100 
                                                                   
Net income                               463,712           527,067 


HSBC USA Inc.                            Consolidated balance sheet

                                  At 31 December  At 31 December 
Figures in US$ thousands                    1999            1998 
                                                                 
Assets                                                           
Cash and due from banks                1,977,756       1,262,423 
Interest bearing deposits with banks   4,234,668       2,373,550 
Federal funds sold and securities                                
  purchased under resale agreements    2,318,361          86,919 
Trading assets                         4,526,988         826,019 
Securities available for sale         25,973,805       4,237,679 
Securities held to maturity            4,811,695               - 
                                                                 
Loans                                 37,909,143      24,049,499 
Less - allowance for credit losses       659,603         379,652 
Loans, net                            37,249,540      23,669,847 
                                                                 
Premises and equipment                   745,910         207,685 
Accrued interest receivable              778,363         238,790 
Investment in affiliate                2,540,927          25,261 
Goodwill and other acquisition                                   
  intangibles                          3,307,147         335,390 
Other assets                           1,774,459         680,523 
                                                                 
Total assets                          90,239,619      33,944,086   
                                                                   
Liabilities                                                      
Deposits in domestic offices                                     
- Non-interest bearing                 6,003,813       3,552,303 
- Interest bearing                    29,393,957      18,168,438 
Deposits in foreign offices                                      
- Non-interest bearing                   187,099               - 
- Interest bearing                    20,865,022       4,545,069 
Total deposits                        56,449,891      26,265,810 
                                                                 
Trading account liabilities            2,440,729          76,767 
Short-term borrowings                  5,271,597       2,886,009 
Interest, taxes and other                                        
  liabilities                          3,059,993         739,556 
Payable to shareholders of acquired                              
  company                              7,091,209               - 
Subordinated long-term debt and                                  
  perpetual capital notes              3,427,649         722,346 
Guaranteed mandatorily redeemable                                
  securities                             710,259         400,000 
Other long-term debt                   1,747,131         625,345 
Total liabilities                     80,198,458      31,715,833 
                                                                   
Shareholders' equity                                             
Preferred stock                          500,000               - 
Common shareholders' equity                                      
- Common stock                                 4               5 
- Capital surplus                      8,920,113       1,806,563 
- Retained earnings                      671,578         377,179 
- Accumulated other comprehensive                                
  income (loss)                          (50,534)         44,506 
Total common shareholders' equity      9,541,161       2,228,253 
Total shareholders' equity            10,041,161       2,228,253 
                                                                 
Total liabilities and shareholders'                              
equity                                90,239,619      33,944,086