Pre-close Trading Update

HSBC Holdings PLC
09 December 2003

                  HSBC HOLDINGS PLC - PRE-CLOSE TRADING UPDATE

HSBC Holdings plc ("HSBC") will be conducting a trading update today with
analysts and investors ahead of its close period for the year ending 31 December
2003. The meeting will take place by conference call from 9:00 am until 10:00 am
local time in London. Details for participating in the call can be found at the
end of this statement.

The information that will be covered during the meeting relating to HSBC's
operating performance is as follows:

HSBC's performance in the third quarter of 2003 continued to benefit from the
breadth and capital generating strength of its core businesses. Operating
performance remained resilient, and began to show some more encouraging revenue
trends towards the end of the quarter, particularly in Personal Financial
Services and Consumer Finance. Business sentiment improved in most of HSBC's
major markets, notably in the Hong Kong SAR and in the United States.

Except where otherwise stated, comparisons are against the second quarter of
2003 or against the position as at 30 June 2003.

In a sustained low interest rate environment, HSBC's net interest margin fell
modestly in the third quarter as rates remained at historic low levels. Balance
sheet growth, however, more than compensated for the margin decline. Lending
growth was principally in the personal sector, with low interest rates and
continuing consumer confidence attracting continued growth in both mortgages and
other personal lending. In value terms, personal lending growth was strongest in
the United Kingdom and the United States, in particular in Household, but growth
was also strong in Singapore, Korea, Malaysia, Taiwan and India. Lending to the
corporate sector remained subdued.

Dealing profits in the third quarter of 2003 remained strong, and although not
at the same run rate as in the first half of the year, were well ahead of the
comparable period in 2002. Third quarter dealing profits also absorbed the
impact of losses arising on hedges taken against the value of US mortgage
servicing rights during a period of volatile interest rate movements. This
impaired revenues by US$98 million.

Fee and commission revenues were stronger in all geographic regions and in all
customer groups.

Costs in the third quarter of 2003 remained broadly in line with the prior
quarter, after accommodating a number of costs associated with long-term
restructuring programmes.

In general, credit quality remained stable throughout the Group, with improved
experience in Hong Kong offsetting a small number of corporate provisions
against specific customers in Europe. Credit trends in Household showed early
signs of improvement and this has continued into the fourth quarter to date.
Provisions against commercial banking exposures remained at historically low
levels.

The integration of both Household and GF Bital progressed well, with synergy
benefits and business opportunities tracking at, or better, than expectations in
most areas.

The Group's liquidity position and capital ratios remained strong. Innovative
Tier 1 capital issues since 30 June 2003 amounted to the equivalent of US$2.9
billion which together with a US$1.0 billion scrip dividend retention on the
first interim dividend have added approximately 68 basis points to the Tier 1
ratio.

The first quarterly dividend payable on 20 January 2004 was declared on 10
November and accrues to shareholders on the register as at 28 November.

HSBC's results for the year ending 31 December 2003 will be announced on Monday,
1 March 2004.

On 27 November 2003, HSBC hosted an Investor Day entitled "Managing for Growth"
and presented its new strategic plan for 2004 to 2008. Copies of the
presentation slides can be downloaded at http://www.hsbc.com/investorday.

Conference call details

The conference call is being hosted by Douglas Flint, Group Finance Director,
and will be accessible by dialling:

UK: [phone]

US: [phone]

Hong Kong: [phone]

A recording of the conference call will be available for seven days on HSBC's
website by following this link http://www.hsbc.com/precloseupdate from shortly
after the event.

Forward-looking statements

This presentation and subsequent discussion may contain 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 uncertainties that could cause actual results, performance or events
to differ materially from those expressed or implied in such statements.
Additional detailed information concerning important factors that could cause
actual results to differ materially is available in our Annual Report.

HSBC Holdings plc

With over 9,500 offices in 79 countries and territories, and assets of US$983
billion at 30 June 2003, the HSBC Group is one of the world's largest banking
and financial services organisations.


                      This information is provided by RNS
            The company news service from the London Stock Exchange