Insurance Operations - Brazil

HSBC Holdings PLC
01 March 2007


The following is the text of an announcement which was published in the press in
Brazil on 28 February 2007 by HSBC Seguros (Brasil) S. A., a 97.9 per cent
directly held subsidiary of HSBC Bank Brasil S.A.


                      HSBC'S INSURANCE OPERATIONS IN BRAZIL
                        2006 ANNUAL RESULTS - HIGHLIGHTS
                                        
These financial statements have been prepared and presented in accordance with
the provisions of the Corporate Law 6.404/76, which requires adherence to
Brazilian GAAP (generally accepted accounting principles), and have been audited
by KPMG. HSBC Seguros (Brasil) S. A. is required to file periodic financial 
information on an annual basis (in this case for the year ended 31 December 
2006) and this information is publicly available. Given that this information
is available in the public domain, HSBC has elected to file this release.

The financial statements of HSBC Seguros (Brasil) S. A. are presented on a
consolidated basis comprising the following subsidiaries:

HSBC Vida e Previdencia (Brasil) S. A.;
HSBC Empresa de Capitalizacao (Brasil) S. A.; and
HSBC Capitalizacao (Brasil) S. A.

Figures are stated in both Brazilian reais (R$) and US dollars (US$).

On 30 November 2005, HSBC Seguros de Automoveis e Bens Ltda., a property and
casualty insurance underwriting business, was sold by HSBC Seguros (Brasil) S.A.
to HDI Seguros S.A. Therefore, 2005 results benefited from a one-time pre-tax
profit gain of R$217 million (US$89 million) following the sale of the business.

Financial highlights for the year ended 31 December 2006

• Net profit down 48.8 per cent to R$179 million (US$82 million) from R$350
  million (US$144 million) in 2005.

• Operating income up 13.2 per cent to R$257 million (US$118 million) from R$227
  million (US$93 million) in 2005.

• Earned premiums down 37.3 per cent to R$505 million (US$232 million) from
  R$806 million (US$331 million) in the previous year.

• Insurance claims down 54.7 per cent to R$197 million (US$90 million) from
  R$435 million (US$179 million) in 2005.

• Operational expenses down 20.3 per cent from R$339 million (US$139 million) in
  2005 to R$270 million (US$124 million) in 2006.

• Technical reserves up 37.6 per cent to R$3,441 million (US$1,612 million).

• Total assets up R$1,163 million (US$669 million), or 36.2 per cent, to R$4,379
  million (US$2,051 million).

• Return on average shareholders' equity of 34.1 per cent.

Overview

On a like-for-like basis, HSBC Seguros (Brasil) S.A. recorded a net profit of
R$179 million (US$82 million), up 16.9 per cent after normalising for the sale
of the property and casualty business in 2005.

Profit before tax on a like-for-like basis was R$273 million (US$125 million) in
2006, up 13.7 per cent, compared to R$240 million (US$99 million) in 2005.

Total assets grew 36.2 per cent, driven by the growth of 46.1 per cent in life
premiums as a result of focused sales activity during the year.

The combined ratio improved from 99.6 per cent to 95.7 per cent.

Notes to editors:

1. HSBC Seguros (Brasil) S. A.

HSBC Seguros (Brasil) S.A. is a subsidiary of HSBC Bank Brasil S.A. - Banco
Multiplo, and it is part of an integrated financial services business, with a
total of 1,324 employees at 31 December 2006. The company manufactures life and
personal accident policies and pension plans, sold through the HSBC Brazil
branch network as well as independent brokers. The company was ranked the 10th
largest life insurance company in 2005 based on earned premiums.

2. HSBC Holdings plc

The HSBC Group serves over 125 million customers worldwide through some 9,500
offices in 81 countries and territories in Europe, the Asia-Pacific region, the
Americas, the Middle East and Africa. With assets of US$1,738 billion at 30 June
2006, HSBC is one of the world's largest banking and financial services
organisations. HSBC is marketed worldwide as 'the world's local bank'.




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