MLHSBC integrated into HSBC

HSBC Holdings PLC Merrill Lynch & Co. Inc. 17 May 2002 The following is the text of an announcement issued jointly by HSBC Holdings plc and Merrill Lynch today. MLHSBC TO BE INTEGRATED INTO HSBC HSBC and Merrill Lynch have agreed in principle that their joint venture company, Merrill Lynch HSBC (MLHSBC), will be integrated into the HSBC Group. MLHSBC was formed as a 50:50 joint venture between HSBC and Merrill Lynch in April 2000 to provide direct investment and banking services over the internet to mass affluent investors outside the US. The company currently operates in Australia, Canada and the UK. In the past year, MLHSBC has been ranked first in Europe for 'Usability' by BlueSky International, and 'Most Consumer Friendly Online Broker' by Investor's Week magazine. In Australia, the company was named 'Online Broker of the Year' and 'Best Online Broker for Experienced Investors' by Personal Investor magazine and by yourbroker.com.au respectively. The Globe & Mail in Canada ranked MLHSBC a close second to the country's market leading broker. However, notwithstanding the progress made, economic conditions and low online investor volume have created a difficult trading environment for the joint venture and business expansion plans have been postponed for the time being. Following a strategic review of the joint venture, it was considered that the business could be developed more effectively if integrated within the HSBC Group rather than remaining as a joint venture. The decision also reflects Merrill Lynch's review of its international retail operations in the light of changed market conditions. Going forward, MLHSBC will enjoy more direct access to the resources of HSBC. It is intended that the business will continue to use Merrill Lynch as part of its name and clients will still have access to Merrill Lynch research, for 21/2 years. Merrill Lynch will also continue to provide trading and settlement services for a transition period. Keith Whitson, HSBC's Group Chief Executive and Chairman of MLHSBC, said: "HSBC remains confident in the long-term prospects for MLHSBC's business. We are pleased that the new structure allows for a continuing relationship with Merrill Lynch, including access to Merrill's research for MLHSBC clients." Michael Marks, Executive Vice President of Merrill Lynch and Chairman of Merrill Lynch Investment Managers and International Private Client Group, commented: "We are very pleased to have reached this agreement with HSBC, which has resulted from a strategic review of all our business operations in the light of changed market conditions." Merrill Lynch does not envisage a material impact to its financial results for the 2002 second quarter or future periods as a result of this agreement. As at 31 December 2001, the net asset value of MLHSBC was US$109 million. Notes to editors: The HSBC Group (NYSE: HBC) Headquartered in London, with assets of US$696 billion as at 31 December 2001, the HSBC Group is one of the largest banking and financial services organisations in the world. HSBC's international network comprises some 7,000 offices in 81 countries and territories in Europe, Asia-Pacific, the Americas, the Middle East and Africa. For further information on HSBC, please visit www.hsbc.com Merrill Lynch (NYSE: MER) Merrill Lynch is one of the world's leading financial management and advisory companies, with offices in 38 countries and total client assets of approximately US$1.4 trillion. As an investment bank, it is a leading global underwriter of debt and equity securities and strategic advisor to corporations, governments, institutions, and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. For more information on Merrill Lynch, please visit www.ml.com The foregoing statements may include forward-looking information subject to risks, uncertainties and other factors that could materially affect actual results. These are described in Merrill Lynch's 2001 reports on Forms 10-K, 10-Q and 8-K and in the 2001 Annual Report on Form 20-F of HSBC Holdings plc, which are available at the SEC's website, www.sec.gov This information is provided by RNS The company news service from the London Stock Exchange
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