No 4 HUSI Final Results (1/1)

HSBC Holdings PLC
4 March 2002

                                 HSBC USA INC.
                           2001 results - HIGHLIGHTS

* Full-year net income in 2001 increased by 24 per cent to US$704 million
compared to US$569 million in 2000 before the effect of a provision for the
Princeton Note Matter ("Princeton"). On a GAAP basis, after the provision for
Princeton, HSBC USA Inc. reported net income of US$353 million for the year
ended 31 December 2001.

* Cash earnings ^ in 2001 were US$872 million before the provision for
Princeton, an increase of 20 per cent compared to US$725 million in 2000.

* The cost:income ratio (excluding goodwill amortisation, restructuring costs
and the provision for Princeton) for 2001 was 52.9 per cent, compared to 55.7
per cent in 2000.

* Tier 1 capital to risk-weighted assets was 8.3 per cent at 31 December 2001,
compared to 8.4 per cent at 31 December 2000.

* Cash earnings ^ as a percentage of average common equity for the full-year
2001 were 12.8 per cent before the provision for Princeton, compared to 11.0 per
cent during 2000.

* Client assets under administration at 31 December 2001 were US$48.7 billion,
of which US$32.4 billion were funds under management and US$16.3 billion were
custody accounts.

^ Cash earnings are net income after preferred dividends and after adding back
goodwill amortisation and expense associated with HSBC Group share option plans.




Note: Figures for 2000 have been restated to exclude an investment in an entity
transferred to HSBC North America Inc. during 2001.

HSBC USA Inc. reported net income of US$704 million for the year ended 31
December 2001 before a provision for Princeton, an increase of 24 per cent from
US$569 million for the full-year 2000. On the same basis, cash earnings for 2001
increased to US$872 million from US$725 million for 2000. On a GAAP basis in
2001, the company reported net income of US$353 million, after the provision for
Princeton.

Youssef A Nasr, Chief Executive Officer of HSBC USA Inc., said: "In 2001, we
faced the task of having to respond to several unprecedented events. We had to
deal with the tragic events of September 11th. We were also faced with a
challenging business environment. In that light, we are pleased with our
results. Our cash earnings, which remain our primary focus, increased 20 per
cent before the provision taken for the resolution of the Princeton Note
Matter."

Total assets were US$87.1 billion compared to US$83.0 billion at 31 December
2000. Total deposits were US$56.5 billion at 31 December 2001, compared to
US$56.0 billion at 31 December 2000. Within deposits, personal and commercial
demand deposits increased while higher cost CD's declined. Total loans at 31
December 2001 were US$40.9 billion, compared to US$40.4 billion at 31 December
2000. Residential mortgage loans originated and held in the portfolio increased,
and lower margin corporate loans were reduced.

For the year ended 31 December 2001, net interest income increased by US$147
million, or 7 per cent, to US$2.3 billion. Total average earning assets
increased US$3.9 billion or 5.2 per cent compared to 2000. In addition to the
benefit of more lower cost personal and commercial deposits, short-term rate
cuts led to wider interest margins in certain commercial businesses, the
residential mortgage business and treasury.

For the full-year, other operating income was US$1.1 billion, an increase of
US$263 million, or 32 per cent from US$832 million in 2000. Wealth management,
insurance and bankcard fees all grew as former Republic National Bank of New
York customers were introduced to new products. Brokerage revenues were up 26
per cent due in part to sales of annuities. Insurance revenues increased 44 per
cent over the prior year. Mortgage origination and servicing income dropped 17
per cent compared to last year, after considering trading losses and securities
gains in programs to protect mortgage origination and servicing fees against
interest rate swings and prepayments.

Within the commercial segment, harmonization of HSBC and the former Republic
product lines led to increases in deposit, cash management and loan related
fees.

Treasury trading revenues were US$266 million, or 90 per cent higher than in
2000. All major trading functions recorded higher revenues in 2001 including
foreign exchange, derivatives, precious metals and banknotes. In addition, gains
of US$149 million were realised as securities were sold to mitigate interest
rate and other risks.

Operating expenses, excluding the provision for Princeton, increased 3 per cent
to US$2.0 billion from US$1.9 billion last year. Lower restructuring expenses in
2001 were offset by higher costs due to business expansion in treasury, wealth
management and e-commerce, and increased marketing expenses. Incentive
compensation tied to performance also increased. Caused by the weaker US economy
as well as the response to 11 September, airlines have posted large losses, and
the company wrote off US$12 million of airline exposure.

During 2001, while the company's non-performing assets remained relatively
stable, the business and credit environment has been volatile and weaker
compared to 2000. It is still too early to determine the medium to longer-term
effect that the events of 11 September and the general economic slowdown will
have on the overall credit portfolio. Net charge-offs for the full year 2001 of
US$238 million were the same as in 2000. The company took more provisions in the
fourth quarter of 2001 compared to prior quarters including an exposure to a
single large corporate in the energy sector. The ratio of allowance available
for loan losses to non-accruing loans was 121.5 per cent at the end of 2001
compared to 124.1 per cent at the end of 2000.

As part of its strategy of providing customers with multiple choices for product
and service delivery, HSBC Bank USA offers a comprehensive internet banking
service. At 31 December 2001, more than 275,000 customers had registered for the
service, up from approximately 80,000 at year-end 2000. The HSBC Bank USA web
site, us.hsbc.com, where customers can apply for accounts, conduct financial
planning and link to online services, receives over 24,000 visits daily.

In the fourth quarter of 2001, HSBC USA Inc. announced that it had settled civil
law suits brought by 51 of the 53 Japanese plaintiffs who have asserted claims
against arising from the involvement of its subsidiary, Republic New York
Securities Corporation ("RNYSC") in the Princeton Note Matter ("Princeton"). Two
of the noteholders, whose civil suits seek damages arising from unpaid Princeton
Notes with face amounts totalling US$125 million, are not included in the
settlement and their civil suits will continue. The US Government excluded one
of them because that noteholder is being criminally prosecuted in Japan for its
conduct relating to its Princeton Notes, and excluded the other because the sum
it is likely to recover from the Princeton Receiver exceeds its losses
attributable to its fund transfers with RNYSC as calculated by the US
Government. The company also announced that it had resolved all of the
previously reported regulatory and criminal investigations arising from
Princeton.

A charge of US$575 million before tax was taken by the company in the third
quarter of 2001 to reflect the anticipated resolution of Princeton which came to
light prior to HSBC's acquisition of Republic New York Corporation, RNYSC's
parent, in December, 1999. The after tax cost of Princeton to the company,
including the US$575 million pre tax charge taken in the 2001 third quarter and
the US$79 million pre tax charge taken in the fourth quarter of 2000, is within
the range of the price reduction taken by companies controlled by the late Mr.
Edmond Safra at the time of the acquisition by HSBC Holdings plc of Republic New
York Corporation.

About HSBC Bank USA

HSBC Bank USA has more than 415 branches in New York State, giving it the most
extensive branch network in New York. The bank also has eight branches in
Florida, two in Pennsylvania, three in California and 17 in Panama.

HSBC Bank USA is the principal subsidiary of HSBC USA Inc. which is the eleventh
largest US holding company in the US in total assets, and an indirectly-held,
wholly-owned subsidiary of HSBC Holdings plc (NYSE: HBC). Headquartered in
London, and with some 7,000 offices in 81 countries and territories, the HSBC
Group is one of the world's leading banking and financial services
organisations.

For more information about HSBC Bank USA and its products and services visit
www.us.hsbc.com.

Summary
                                                   Quarter ended                       Twelve months ended
Figures in US$ millions                         31Dec01        31Dec00 ^                 31Dec01          31Dec00 ^
                                                                       ^                                          ^

                                                     As                               As        Excluding
                                               reported                         reported        Princeton

Net income                                          152            135               353              704       569

Cash earnings^                                    195            176               521              872       725

Performance ratios (%)
Cash earnings as a percentage of
 average common equity                             11.4           10.5               7.6             12.8      11.0
Cost:income ratio
 (excluding goodwill amortisation,
 restructuring costs, and
 Princeton Note Matter)                            54.9           54.8              52.9                       55.7
Staff numbers (full-time                                                          14,378                     14,639
equivalents)

Average balances
Loans                                            41,935         39,942            41,441                     38,966
Earning assets                                   79,548         74,511            78,206                     74,313
Total assets                                     87,883         82,969            86,276                     82,788
Deposits                                         56,452         55,922            57,430                     55,032
Common equity                                     6,765          6,677             6,834                      6,583

Net yields on total assets
 (tax equivalent basis) (%)                         2.7            2.5               2.7                        2.6

Assets under administration
Funds under management                                                            32,350                     30,278
Custody accounts                                                                  16,328                     15,616
Total assets under administration                                                 48,678                     45,894

Credit information
Non-accruing loans                                                                   417                        423
Net charge offs                                                                      238                        239
Allowance available for credit
losses
- Balance at end of period                                                           506                        525
- As a percentage of non-accruing
 Loans                                                                             121.5  %                   124.1 %
- As a percentage of loans outstanding                                              1.24  %                    1.30 %

Capital (at end of period)
Common equity                                                                      6,549                      6,834
As a percentage of total assets                                                      7.5  %                     8.2 %

Capital ratios (%)
Leverage ratio                                                                       5.5                        5.7
Tier 1 capital to risk-weighted                                                      8.3                        8.4
assets
Total capital to risk-weighted                                                      13.3                       13.6
assets

^ Cash earnings are net income after preferred dividends, after adding back
goodwill amortisation

and expense associated with HSBC Group share option plans.

^^ Restated to exclude an investment in an entity transferred to HSBC North
America Inc. during 2001.

Consolidated Statement of Income
                                                                      Quarter ended                 Quarter ended
Figures in US$ thousands                                                    31Dec01                       31Dec00 ^
                                                                                                                  ^

Interest income
Loans                                                                      669,935                       800,558
Securities                                                                 276,148                       392,228
Trading assets                                                              41,211                        50,661
Other short-term investments                                                57,036                       120,903
Total interest income                                                    1,044,330                     1,364,350

Interest expense
Deposits                                                                   323,896                       622,778
Short-term borrowings                                                       54,175                       114,924
Long-term debt                                                              71,186                       102,946
Total interest expense                                                     449,257                       840,648

Net interest income                                                        595,073                       523,702

Provision for credit losses                                                 95,350                        30,992
Net interest income, after provision for credit losses                     499,723                       492,710

Other operating income
Trust income                                                                22,240                        21,587
Service charges                                                             49,848                        42,741
Mortgage servicing fees and gains, net                                      56,462                         9,581
Other fees and commissions                                                  83,746                        74,945
Trading revenues
 - Treasury business and other                                              74,772                        25,559
 - Residential mortgage business related ^^^                               (51,889)                            -
Total trading revenues                                                      22,883                        25,559
Security gains, net                                                          2,596                        18,396
Other income                                                                21,473                        19,587
Total other operating income                                               259,248                       212,396
Total income from operations                                               758,971                       705,106

Other operating expenses
Salaries and employee benefits                                             272,356                       237,123
Occupancy expense, net                                                      38,572                        40,198
Other expenses                                                             156,808                       166,622
Princeton Note Matter                                                            -                             -
Operating expenses before goodwill amortisation                            467,736                       443,943
Goodwill amortisation                                                       43,420                        44,284
Total other operating expenses                                             511,156                       488,227

Income before taxes and cumulative effect of
accounting change                                                          247,815                       216,879
Applicable income tax expense                                               96,300                        81,568
Income before cumulative effect of accounting
change                                                                     151,515                       135,311
Cumulative effect of accounting change-
implementation of SFAS 133                                                       -                             -
Net income                                                                 151,515                       135,311

^^ Restated to exclude an investment in an entity transferred to HSBC North
America Inc. during 2001.

^^^ Trading revenues include the mark-to-market on financial instruments
providing economic protection on mortgage servicing rights values and interest
rate and forward sales commitments in the residential mortgage business.

Consolidated Statement of Income
                                                                      Twelve months                Twelve months
                                                                              ended                        ended
Figures in US$ thousands                                                    31Dec01                      31Dec00 ^
                                                                                                                 ^
Interest income
Loans                                                                    2,937,052                    3,072,830
Securities                                                               1,288,292                    1,580,606
Trading assets                                                             217,007                      140,455
Other short-term investments                                               345,150                      523,693
Total interest income                                                    4,787,501                    5,317,584
Interest expense
Deposits                                                                 1,856,893                    2,334,036
Short-term borrowings                                                      337,205                      444,718
Long-term debt                                                             328,111                      420,298
Total interest expense                                                   2,522,209                    3,199,052

Net interest income                                                      2,265,292                    2,118,532
Provision for credit losses                                                238,400                      137,600
Net interest income, after provision for credit losses                   2,026,892                    1,980,932

Other operating income
Trust income                                                                87,600                       84,906
Service charges                                                            189,025                      172,257
Mortgage servicing fees and gains, net                                      79,369                       32,484
Other fees and commissions                                                 329,509                      300,388
Trading revenues
- Treasury business and other                                              266,010                      140,192
- Residential mortgage business related ^^^                                (67,091)                           -
Total trading revenues                                                     198,919                      140,192
Security gains, net                                                        149,267                       28,839
Other income                                                                61,993                       73,372
Total other operating income                                             1,095,682                      832,438
Total income from operations                                             3,122,574                    2,813,370

Other operating expenses
Salaries and employee benefits                                           1,000,409                      975,391
Occupancy expense, net                                                     155,436                      167,202
Other expenses                                                             635,658                      587,083
Princeton Note Matter                                                      575,000                            -
Operating expenses before goodwill amortisation                          2,366,503                    1,729,676
Goodwill amortisation                                                      176,482                      176,162
Total other operating expenses                                           2,542,985                    1,905,838

Income before taxes and cumulative effect of                               579,589                      907,532
 accounting change
Applicable income tax expense                                              226,000                      338,573
Income before cumulative effect of accounting
 change                                                                    353,589                      568,959
Cumulative effect of accounting change-
implementation of SFAS 133                                                    (451)                           -
Net income                                                                 353,138                      568,959

^^ Restated to exclude an investment in an entity transferred to HSBC North
America Inc. during 2001.

^^^ Trading revenues include the mark-to-market on financial instruments
providing economic protection on mortgage servicing rights values and interest
rate and forward sales commitments in the residential mortgage business.

Consolidated Balance Sheet
Figures in US$ thousands                                                At 31Dec01            At 31Dec00 ^
                                                                                                         ^

Assets
Cash and due from banks                                                  2,102,756              1,860,713
Interest bearing deposits with banks                                     3,560,873              5,129,490
Federal funds sold and securities purchased
Under resale agreements                                                  3,744,624              1,895,492
Trading assets                                                           9,088,905              5,770,972
Securities available for sale                                           15,745,323             17,336,832
Securities held to maturity                                              4,651,329              4,260,492
Loans                                                                   40,923,298             40,417,847
Less - allowance for credit losses                                         506,366                524,984
Loans, net                                                              40,416,932             39,892,863

Premises and equipment                                                     750,041                777,610
Accrued interest receivable                                                416,545                785,286
Equity investments                                                         271,402                 55,596
Goodwill and other acquisition intangibles                               2,895,714              3,229,479
Other assets                                                             3,469,132              2,040,325
Total assets                                                            87,113,576             83,035,150

Liabilities
Deposits in domestic offices
- Non-interest bearing                                                   5,432,106              5,114,668
- Interest bearing                                                      31,695,955             30,631,511
Deposits in foreign offices
- Non-interest bearing                                                     428,252                282,737
- Interest bearing                                                      18,951,096             20,013,588
Total deposits                                                          56,507,409             56,042,504

Trading account liabilities                                              3,799,817              2,766,825
Short-term borrowings                                                    9,202,086              8,562,363
Interest, taxes and other liabilities                                    6,064,462              3,232,918
Subordinated long-term debt and perpetual capital notes                  2,711,549              3,027,014
Guaranteed mandatorily redeemable securities                               728,341                711,737
Other long-term debt                                                     1,050,882              1,357,904
Total liabilities                                                       80,064,546             75,701,265

Shareholders' equity
Preferred stock                                                            500,000                500,000
Common shareholders' equity
- Common stock                                                                   4                      4
- Capital surplus                                                        6,034,598              6,104,264
- Retained earnings                                                        415,821                612,798
- Accumulated other comprehensive income                                    98,607                116,819
Total common shareholders' equity                                        6,549,030              6,833,885
Total shareholders' equity                                               7,049,030              7,333,885
Total liabilities and shareholders' equity                              87,113,576             83,035,150

^^ Restated to exclude an investment in an entity transferred to HSBC North
America Inc. during 2001.



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