Interim Results - Part 2

HSBC HOLDINGS PLC
13 August 1999


PART 2

14. Off-balance-sheet risk-weighted and replacement cost amounts

                            At 30JUN99     At 30JUN98  At 31DEC98 
Figures in US$m                                                   
                                                                  
Risk-weighted amounts                                             
                                                                  
Contingent liabilities          19,814         19,241      19,823 
Commitments                     14,440         15,990      14,187 
                                                                  
Replacement cost amounts                                          
                                                                  
Exchange rate contracts          5,893         10,522       8,899 
Interest rate contracts          4,743          5,002       7,297 
Equities contracts               2,177          2,221       2,218 

Risk-weighted amounts are assessed in accordance with the Financial
Services Authority's guidelines which implement the Basle agreement
on capital adequacy and depend on the status of the counterparty
and the maturity characteristics.

Replacement cost of contracts represents the mark-to-market assets
on all contracts with a positive value, i.e. an asset to the HSBC
Group. Replacement cost is, therefore, a close approximation of the
credit risk for these contracts as at the balance sheet date. The
actual credit risk is measured internally and is the sum of
positive mark-to-market value and an estimate for the future
fluctuation risk, using a future risk factor.

15. Market risk

Market risk is the risk that interest rates, foreign exchange rates
or equity and commodity prices will move and result in profits or
losses to the HSBC Group. Market risk arises on financial
instruments which are valued at current market prices (mark-to-
market basis) and those valued at cost plus any accrued interest
(accruals basis).

The Group makes markets in interest rate, exchange rate and equity
derivative instruments, as well as in debt, equities and other
securities. Trading risks arise either from customer-related
business or from position taking.

The Group manages market risk through risk limits approved by the
Group Executive Committee. Group Market Risk, an independent unit
within HSBC Holdings plc, develops risk management policies and
measurement techniques, and reviews limit utilisation on a daily
basis.

Risk limits are determined for each location and, within location,
for each portfolio. Limits are set by product and risk type with
market liquidity being a principal factor in determining the level
of limits set. Only those offices with sufficient derivative
product expertise and appropriate control systems are authorised to
trade derivative products. Limits are set using a combination of
risk measurement techniques, including position limits, sensitivity
limits, as well as value at risk (VAR) limits at a portfolio level.
Similarly, option risks are controlled through full revaluation
limits in conjunction with limits on the underlying variables that
determine each option's value.

VAR is a technique which estimates the potential losses that could
occur on risk positions taken due to movements in market rates and
prices over a specified time horizon and to a given level of
confidence. The Group VAR, calculated on a variance/co-variance
basis, uses historical movements in market rates and prices, a 99
per cent confidence level, a 10-day holding period and generally
takes account of correlations between different markets and rates.
The movement in market prices is calculated by reference to market
data from the last two years. Aggregation of VAR from different
risk types is based upon the assumption of independence between
risk types.

The Group VAR is a principal component of the management of market
risk for the Group.  Historically, this has been calculated to a 95
per cent confidence level and for a one-day holding period. From
the beginning of 1999, VAR is being calculated at a 99 per cent
confidence level for a 10-day holding period^. This change has been
made to facilitate consistency with the regulatory requirements for
the use of internal models used to calculate market risk capital
requirements and remains consistent with the Group's risk
management control framework.

VAR methodologies have inherent limitations. Therefore, the Group
VAR should not be viewed as a maximum amount that the Group can
lose on its market risk positions. The Group recognises these
limitations by augmenting the VAR limits with other position and
sensitivity limit structures, as well as with stress testing, both
on individual portfolios and on a consolidated basis. The Group's
stress testing regime provides senior management with an assessment
of the impact of extreme events on the market risk exposures of the
Group.

VAR for all interest rate risk and foreign exchange risk positions
at 30 June 1999 was US$257.3 million, compared with US$125.3 million
at 31 December 1998^. The average for the first half of 1999 was
US$216.8 million, with a maximum of US$277.2 million and minimum of
US$167.9 million in the period.  

VAR related to foreign exchange dealing positions at 30 June 1999 
was US$29.1 million (US$14.2 million at 31 December 1998^). 
The average VAR for the first half of 1999 was US$29.1 million, 
with a maximum of US$58.5 million and a minimum of US$16.6
million in the period. The VAR noted for foreign exchange positions
excludes structural foreign currency exposures, since related gains
or losses are taken through reserves.

VAR at 30 June 1999 related to interest rate exposures, including
interest rate risk related to accrual book positions, was US$255.2
million (US$123.4 million at 31 December 1998^). The average VAR for
the first half of 1999 was US$213.4 million, the maximum was
US$275.4 million and the minimum was US$163.0 million.

The average daily revenue earned from market risk-related treasury
activities in the first half of 1999, including accrual book net
interest income and funding related to dealing positions, was
US$9.5 million (first half 1998: US$7.9 million; second half 1998:
US$7.7 million). The standard deviation of these daily revenues was
US$4.6 million. An analysis of the frequency distribution of daily
revenues shows that the lowest daily revenue was between
US$1 million and US$2 million, with three occurrences, and there
were no days showing losses. The most frequent result was a daily
revenue of between US$7 million and US$8 million, with 17
occurrences. The highest daily revenue was US$26 million.

VAR at 30 June 1999 related to equities trading positions was
US$20.2 million (31 December 1998: US$12.0 million^). The average 
VAR for the first half of 1999 was US$15.4 million, the maximum 
was US$26.4 million and the minimum US$11.1 million.

^  The comparative figures for 1998 have been recalculated using
   a 99 per cent confidence level for a 10 day holding period using
   the VAR models in place at that date. It is not practicable
   retrospectively to amend these comparatives for other technical
   changes made to the VAR models since 31 December 1998.

16. Litigation

The Group, through a number of its subsidiary undertakings, is
named in and is defending legal actions in various jurisdictions
arising from its normal business. No material adverse impact on
the financial position of the Group is expected to arise from
these proceedings.

17. Corporate governance

The Group is committed to high standards of corporate governance. 
The Company has complied throughout the period with the 
provisions of Appendix 14 to the Rules Governing the Listing of 
Securities on The Stock Exchange of Hong Kong and with the best 
practice provisions of the Combined Code on corporate governance 
introduced by the London Stock Exchange in June 1998.

18. Differences between UK GAAP and US GAAP^

The consolidated financial statements of HSBC are prepared in
accordance with UK GAAP which differs in certain significant
respects from US GAAP. A summary of the significant differences
applicable to HSBC can be found in HSBC's Registration Statement on
Form 20-F for the year ended 31 December 1998.

The following tables summarise the significant adjustments to
consolidated net income and shareholders' equity which would result
from the application of US GAAP:

Figures in US$m                      Half-year to     Half-year to
                                          30JUN99          30JUN98  
Net Income
                                       
Attributable profit of HSBC                                                   
  (UK GAAP)                                 2,694            2,402 
Lease financing                               (32)             (41)
Debt swaps                                      -                5 
Shareholders' interest in long-
  term assurance fund                         (55)             (31)
Pension costs                                (112)             (19)
Stock-based compensation                      (36)             (16)
Goodwill                                     (151)            (161)
Internal software costs                        72                - 
Revaluation of property                        22               46 
Deferred taxation                                                  
-  US GAAP                            (8)              12
-  on reconciling items               35               28
                                               27               40 
Minority interest in reconciling                                   
  items                                         -              (12)
Estimated net income (US GAAP)              2,429            2,213 
                                                                   
Per share amounts^^                           US$              US$ 
Amounts on a US GAAP basis                                         
                                                  
Basic earnings per ordinary share            0.30             0.28 
Diluted earnings per ordinary share          0.29             0.27
                                                                   
Figures in US$m                    
                                       At 30JUN99       At 31DEC98   
Shareholders' equity                      
Shareholders' funds (UK GAAP)              31,642           27,402 
Lease financing                              (206)            (184)
Debt swaps                                    (67)             (66)
Shareholders' interest in long                                      
  -term assurance fund                       (503)            (473)
Pension costs                                (980)            (945)
Goodwill                                    3,260            3,640 
Internal software costs                        72                - 
Revaluation of property                    (2,471)          (2,507)
Fair value adjustment for                                           
  securities available for sale               507              742 
Dividend payable                            1,118            1,499 
Deferred taxation                                                   
-  US GAAP                           653              661 
-  on reconciling items              407              318     
                                            1,060              979 
Minority interest in                                                
  reconciling items                           240              264 
Estimated shareholders' equity                                      
  (US GAAP)                                33,672           30,351 
                             
^   Generally accepted accounting principles.

^^  Per share amounts are stated after adjusting for the three-for-one 
    share capital reorganisation that took place on 2 July 1999.
      
Total assets

Total assets at 30 June 1999, incorporating adjustments arising
from the application of US GAAP, would be US$507,058 million 
(31 December 1998: US$493,099 million).

Review report of the auditors, KPMG Audit plc, to HSBC Holdings plc

We have reviewed the interim financial information for the six months ended 
30 June 1999 set out on pages 5 to 15^ which is the responsibility of, and has
been approved by, the Directors.  Our responsibility is to report on the
results of our review.

Our review was carried out having regard to the bulletin Review of Interim
Financial Information, issued by the Auditing Practices Board.  This review
consisted principally of applying analytical procedures to the underlying
financial data, assessing whether accounting policies have been consistently
applied, and making enquiries of Group management responsible for financial
and accounting matters.  The review was substantially less in scope than an
audit performed in accordance with Auditing Standards and, accordingly, we do
not express an audit opinion on the interim financial information.

On the basis of our review:

- in our opinion, the interim financial information has been prepared using 
  accounting policies consistent with those adopted by HSBC Holdings plc in
  its financial statements for the year ended 31 December 1998; and
- we are not aware of any material modifications that should be made to the
  interim financial information as presented.

KPMG Audit plc
Chartered Accountants
London

2 August 1999

^ In this document the references to pages 5 - 15 means from the Consolidated
  Profit and Loss Account which follows the Group Chairman's comment to 
  the end of the Notes to the Accounts which finished immediately above 
  this report.

Additional information

1. Foreign currency amounts

The sterling and Hong Kong dollar equivalent figures shown in the
consolidated profit and loss account and balance sheet are for
information only.

These are translated at the average rate for the period for the
profit and loss account and the closing rate for the balance sheet
as follows:

Period-end                         30JUN99   30JUN98      31DEC98

Closing  : HK$/US$                   7.759     7.749        7.746

         : £/US$                     0.635     0.600        0.603

Average  : HK$/US$                   7.751     7.745        7.747^

         : £/US$                     0.617     0.606        0.601^

^  Average for the second half of 1998.

2. Directors' interests

According to the registers of Directors' interests maintained by the
Company pursuant to section 325 of the Companies Act 1985 and section
29 of the Securities (Disclosure of Interests) Ordinance, the Directors
of the Company at 30 June 1999 had interests, all beneficial unless
otherwise stated, in the shares and loan capital of the Company as
detailed below.  As a result of a share capital reorganisation
implemented on 2 July 1999, each ordinary share of 75p or HK$10 each was
replaced with three new ordinary shares of US$0.50 each.  For the purposes
of comparison, the corresponding number of new ordinary shares of US$0.50
held following the reorganisation is also shown.

                                                                    Equivalent
                                                                     number of
                                                                      ordinary
                                                                     shares of
                  At                    At 30 June 1999             US$0.50 at
               01JAN99 Personal   Family Corporate   Other     Total   02JUL99

Ordinary Shares of HK$10

Sir John Bond   18,891   18,253      973         -       -    19,226    57,678
R K F Ch'ien     7,405    7,405        -         -       -     7,405    22,215
D E Connolly    16,400   16,694        -         -       -    16,694    50,082
W R P Dalton       314      319        -         -       -       319       957
Baroness Dunn   22,788   33,197        -         -       -    33,197    99,591
D G Eldon          850      577        -         -       -       577     1,731
D J Flint        1,730    1,759        -         -       -     1,759     5,277
W K L Fung      95,834   95,834        -         -       -    95,834   287,502
S K Green        4,221        -    4,296         -       -     4,296    12,888
C E Reichardt   10,000   10,000        -         -       -    10,000    30,000
H Sohmen       870,437        -  120,666   635,771^      -   756,437 2,269,311
Sir Adrian
  Swire        108,833        -        -        -  127,833^^ 127,833   383,499
K R Whitson      1,814    1,846        -        -        -     1,846     5,538

Ordinary Shares of 75p^^^

Baroness Dunn    8,000        -        -        -    8,000^^   8,000    24,000
Lord Marshall    2,196    2,235        -        -        -     2,235     6,705
Sir Brian Moffat 1,713        -    1,744        -        -     1,744     5,232
Sir Adrian Swire 8,000        -        -        -   14,420^^  14,420    43,260
Sir Peter 
  Walters       13,005   13,005        -        -        -    13,005    39,015

11.69% Subordinated Bonds 2002 of £1

Sir John Bond   500,000 500,000        -        -        -   500,000
Lord Marshall       975     975        -        -        -       975
Sir Peter Walters 6,500   6,500        -        -        -     6,500

^    Interests held by private investment companies.
^^   Non-beneficial.
^^^  Details of additional interests in ordinary shares of 75p each
     under the Share Option Schemes and Restricted Share Plan are
     set out below.

Share Options (ordinary shares of 75p)
At 30 June 1999, the undernamed Directors held options to acquire
the number of ordinary shares of 75p each set against their
respective names. The options were awarded for nil consideration at
exercise prices equivalent to the market value at the date of award
except that options awarded under the Savings-Related Share Option
Scheme are exercisable at a 15 per cent discount to the market
value at the date of award. Except as otherwise indicated, there
are no performance criteria conditional upon which the outstanding
options are exercisable. The market value of the ordinary shares of
75p each at 30 June 1999 was 2,247 pence. The highest and lowest
market values during the period were 2,444 pence and 1,556 pence.
Market value is the mid-market price quoted on the London Stock
Exchange on the relevant date.

As a consequence of the share capital reorganisation, all awards
under the Share Option Schemes were adjusted by multiplying the
number of shares by three and dividing the relevant exercise price
by three. For the purposes of comparison, the corresponding number
of new ordinary shares of US$0.50 under option is also shown.
                                                                   Equivalent
                                                                    number of
                                                                      options
         Options                                                         over
          exerc-                                 Exercise            ordinary
Options     ised           Exercis-  Exercis-    price in   Options shares of
held at   during  Date of    able       able     pence at   held at   US$0.50
01JAN99   period    award    from^^^   until^^^   30JUN99   30JUN99 at 2JUL99

Sir John Bond
 20,181       - 12Oct1993  12Oct1996  12Oct2003    721.84    20,181    60,543
 20,181       - 08Mar1994  08Mar1997  08Mar2004    851.27    20,181    60,543
 25,000       - 07Mar1995  07Mar1998  07Mar2005    651.80    25,000    75,000
  3,183       - 10Apr1995  01Aug2000  31Jan2001    541.80     3,183^    9,549
 25,000       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    25,000^^  75,000
                                               
W R P Dalton
  7,568       - 12Oct1993  12Oct1996  12Oct2003    721.84     7,568    22,704
 10,091       - 08Mar1994  08Mar1997  08Mar2004    851.27    10,091    30,273
 12,000       - 07Mar1995  07Mar1998  07Mar2005    651.80    12,000    36,000
  2,875       - 10Apr1995  01Aug2000  31Jan2001    541.80     2,875^    8,625
 12,000       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    12,000^^  36,000

D G Eldon
  8,577   8,577 12Oct1993  12Oct1996  12Oct2003    721.84         -         -
 10,091  10,091 08Mar1994  08Mar1997  08Mar2004    851.27         -         -
 12,000       - 07Mar1995  07Mar1998  07Mar2005    651.80    12,000    36,000
 13,500       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    13,500^^  40,500
       
D J Flint
 12,000       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    12,000^^  36,000
  1,271       - 09Apr1997  01Aug2002  31Jan2003  1,356.18     1,271^    3,813

S K Green
  8,072       - 12Oct1993  12Oct1996  12Oct2003    721.84     8,072    24,216
 12,108       - 08Mar1994  08Mar1997  08Mar2004    851.27    12,108    36,324
 15,000       - 07Mar1995  07Mar1998  07Mar2005    651.80    15,000    45,000
 15,000       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    15,000^^  45,000
  1,879       - 03Apr1996  01Aug2001  31Jan2002    917.70     1,879^    5,637

K R Whitson
 12,613       - 08Mar1994  08Mar1997  08Mar2004    851.27    12,613    37,839
 20,000       - 07Mar1995  07Mar1998  07Mar2005    651.80    20,000    60,000
  3,183       - 10Apr1995  01Aug2000  31Jan2001    541.80     3,183^    9,549
 20,000       - 01Apr1996  01Apr1999  01Apr2006  1,000.00    20,000^^  60,000
                                                                 
No options were awarded to Directors during the period.

^   Options awarded under the Savings-Related Share Option Scheme.
 
^^  The exercise of these options is conditional upon the growth in
    earnings per share over a three-year period being equal to or
    greater than a composite rate of inflation (comprising 50 per cent
    of the Hong Kong Composite Consumer Price Index, 35 per cent of the
    UK Retail Price Index and 15 per cent of the USA All Urban Consumer
    Price Index) plus 2 per cent per annum.

^^^ May be advanced to an earlier date in certain circumstances, eg
    retirement.

Restricted Share Plan (ordinary shares of 75p)                

                         Monetary                                
                         value of                                  Equivalent
                           awards                                   number of 
                   Awards    made  Awards                  Awards    ordinary
           Awards    made  during  vested  Year in which  held at   shares of
          held at  during  period  during    awards will  30 June     US$0.50
          01JAN99  period   (£000) period           vest     1999^ at 02JUL99

Sir John Bond
            8,156       -       -       -   2001 or 2002    8,302      24,906
            8,613       -       -       -   2002 or 2003    8,775      26,325
                -  16,741     300       -           2004   17,043      51,127
W R P Dalton
            5,101       -       -       -   2001 or 2002    5,192      15,576
           10,345       -       -       -           2001   10,531^^    31,591
            5,748       -       -       -   2002 or 2003    5,851      17,552
                -   9,765     175       -           2004    9,942      29,824
D G Eldon
            6,121       -       -       -   2001 or 2002    6,231      18,692
            6,896       -       -       -   2002 or 2003    7,020      21,059
                -   9,765     175       -           2004    9,942      29,824
D J Flint
            5,101       -       -       -   2001 or 2002    5,192      15,576
            5,748       -       -       -   2002 or 2003    5,851      17,552
                -   9,765     175       -           2004    9,942      29,824
S K Green
            6,121       -       -       -   2001 or 2002    6,231      18,692
            6,896       -       -       -   2002 or 2003    7,020      21,059
                -   9,765     175       -           2004    9,942      29,824
K R Whitson
            6,121       -       -       -   2001 or 2002    6,231      18,692
            6,896       -       -       -   2002 or 2003    7,020      21,059
                -  13,950     250       -           2004   14,202      42,606

Unless otherwise indicated, vesting of these shares is subject to the
performance tests described in the 1996, 1997 and 1998 Annual Report
and Accounts being satisfied.

^  Includes additional shares arising from scrip dividends.
^^ Award not subject to performance conditions.

S K Green has a personal interest in euro 70,000 of HSBC Holdings plc
5.5 per cent Subordinated Notes 2009, which he acquired during the period.
Mr Green also has a personal interest in £100,000 of Midland Bank plc
9 per cent Subordinated Notes 2005, which he held throughout the period.

H Sohmen has a corporate interest in £1,200,000 of Midland Bank plc
9 per cent Subordinated Notes 2005, which he held throughout the period.
Mr Sohmen also has a corporate interest in US$3,000,000 of Midland Bank plc
Senior Subordinated Floating Rate Notes 2009, which he acquired during
the period.

Save as stated above, none of the Directors had an interest in any
shares or debentures of any Group company at the beginning or at the
end of the period and none of the Directors, or members of their immediate
families, was awarded or exercised any right to subscribe for any
shares or debentures during the period. No options held by Directors
lapsed during the period.

3. Year 2000 readiness

HSBC recognises that with the approach of the new millennium the
inability of information technology ('IT') and other systems around
the world to recognise the date change from 31 December 1999 to
1 January 2000 could pose significant issues. HSBC has adopted the
Year 2000 conformity requirements issued by the British Standards
Institution as its definition of Year 2000 compliance, that is
neither performance nor functionality be affected by the changing
of dates during and after the Year 2000.

HSBC has assessed the impact of Year 2000 and does not expect
either its operations or service to customers to be disrupted as a
result of HSBC's systems not being Year 2000 compliant. HSBC does
not believe that the Year 2000 risks it faces in emerging markets
are markedly greater than those it faces in other markets. Steering
Committees have been formed in all the key business units and
progress on the Year 2000 compliance programme ('the Year 2000
Programme') is reported regularly to their Boards of Directors and
to the Group Audit and Executive Committees.

HSBC is testing all of its relevant systems under the Year 2000
Programme to ensure that they are Year 2000 compliant and is
seeking written confirmation from suppliers and service providers
that their products and services are Year 2000 compliant. While
HSBC has received responses from a majority of its suppliers and
service providers and no material problems appear to be present, it
is still evaluating the responses.

HSBC is also assessing its customers' commitment to achieving
compliance and is providing information and assistance to help
customers understand the risks and issues. HSBC has revised
relevant credit and investment policies and trained relationship
managers to ensure that Year 2000 risks are taken account of in
credit and investment evaluations.

HSBC has already reviewed substantially all lines of programme code
in its computer systems for Year 2000 compliance and made the
required amendments or replacements. The great majority of these
systems have been tested and are currently in use. In addition,
HSBC expects to replace the small number of computer systems which
remain non-compliant by September 1999 as part of its existing
technology development programme.

In other areas of IT, HSBC is reviewing its end-user computing
applications, networks, centralised data systems and desk-top
environments for Year 2000 compliance. Substantially all of HSBC's
end-user computing applications and inventory items related to
HSBC's networks have already been made compliant. HSBC's programme
to ensure the hardware and software elements of HSBC's data centre
systems have been made Year 2000 compliant is on schedule and
substantially complete.

HSBC has evaluated the potential effect of the Year 2000 on its non-
IT systems, including its facilities and other business processes.
Substantially all of HSBC's facilities and related systems have
been evaluated and, where not already compliant, are in the process
of being made compliant. Other business processes are similarly
being addressed across HSBC.

HSBC is finalising business contingency plans to address the
perceived risks associated with the arrival of the Year 2000. These
plans include mitigating the effects of any failure to complete
remedial work on critical business systems, business resumption
contingency plans to address the possibility of systems failure and
market resumption contingency plans to address the possibility of
the failure of systems or processes outside HSBC's control. HSBC
is, however, unable to predict the effect if any of the efforts to
address the Year 2000 problem fail.

Lack of readiness on the part of third parties could expose HSBC to
the potential for loss, impairment of business processes and
activities and disruption of financial markets. HSBC is addressing
these risks through bilateral and multiparty efforts and
participates in industry, country and global initiatives.

For more than a decade, parts of HSBC have been modifying their
systems to be Year 2000 compliant when making other enhancements.
The costs of the Year 2000 modifications made as part of such a
combined package have not been separately identified. Costs
incurred for the six months ended 30 June 1999 were US$30 million
(including US$12 million attributable to incremental external
costs). HSBC expects that the additional costs of completing the
Year 2000 compliance and testing process will be approximately
US$24 million (including US$8 million attributable to incremental
external costs). Costs relating to major systems changes that are
not directly related to the Year 2000 but which address some Year
2000 issues are not included in these costs.

4. Substantial interests in share capital

No substantial interest, being 10 per cent or more, in the equity
share capital is recorded in the register maintained under
Section 16(1) of the Securities (Disclosure of Interests)
Ordinance.

5. Dealings in HSBC Holdings shares

Save for dealings by HSBC Investment Bank plc, trading as an
intermediary in the Company's shares in London, neither the
Company nor any subsidiary undertaking has bought or sold any
shares of the Company during the six months ended 30 June 1999.

6. Forward-looking Statements

This Interim Report contains certain forward-looking
statements with respect to the financial condition, results
of operations and business of the Group. These forward-
looking statements represent the Group's expectations or
beliefs concerning future events and involve known and
unknown risks and uncertainty that could cause actual
results, performance or events to differ materially from
those expressed or implied in such statements. For example,
certain of the market risk disclosures, some of which are
only estimates and therefore could be materially different
from actual results, are dependent on key model
characteristics and assumptions and are subject to various
limitations. Certain statements, such as those that include
the words 'potential', 'value at risk', 'estimated', and
similar expressions or variations on such expressions may be
considered 'forward-looking statements'.

7. Registers of shareholders

The Overseas Branch Register of shareholders in Hong Kong will be
closed from Wednesday, 18 August 1999 until Friday, 20 August 1999
(both dates inclusive). Any person who has acquired shares
registered on the Hong Kong Branch Register but who has not lodged
the share transfer with the Branch Registrar should do so before
4.00 p.m. on Tuesday, 17 August 1999 in order to receive the
dividend.

Any person who has acquired shares registered on the Principal
Register in the United Kingdom but who has not lodged the share
transfer with the Principal Registrar should do so before 4.00 p.m.
on Friday, 20 August 1999 in order to receive the dividend.
Transfers between the Principal Register and the Branch Register
may not be made while the Branch Register is closed.

Similarly, transfers of American Depositary Shares must be lodged
with the depositary, HSBC Bank USA, by noon on Friday, 20 August
1999 in order to receive the dividend.

8. Statutory accounts

The information in this Interim Report is unaudited and does not 
constitute statutory accounts within the meaning of Section 240 of 
the Companies Act 1985 ('the Act'). The statutory accounts for the 
year ended 31 December 1998 have been delivered to the Registrar 
of Companies in England and Wales in accordance with Section 242 
of the Act. The auditor has reported on those accounts; its report 
was unqualified and did not contain a statement under Section 237(2) 
or (3) of the Act.