Pre-Close Trading Update

HSBC Holdings PLC
10 December 2004



                  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
2004. There will also be an opportunity to discuss the content of HSBC's filing
at the Securities and Exchange Commission ("SEC") summarising the significant
differences between HSBC Group reporting on a UK Generally Accepted Accounting
Principles ("UK GAAP") and International Financial Reporting Standards ("IFRS")
basis.

The meeting will take place by conference call from 10:00 am until 12:00 noon
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 2004 was satisfactory. In aggregate, 
all geographic regions were ahead of the comparable prior year quarter at the 
pre-tax level, before goodwill amortisation. With the exception of Group 
Private Banking, which was modestly lower largely as a result of lower disposal
gains in the quarter, all Customer Groups were similarly ahead of the comparable
quarter in 2003.

Rising interest rates and continuing concern over the global imbalances referred
to in our interim report are being reflected in continuing muted large corporate
demand for credit in our three major markets, with growth in personal lending, 
predominantly in real estate-secured lending, contributing the majority of 
incremental credit growth. In Asia, trade-related and small business credit also
remained strong, while buoyant economic conditions in the commodity and 
oil-exporting regions supported good credit growth in South America and the 
Middle East.

With credit demand outside the personal sector generally muted, market liquidity
remained strong contributing to a continuation of the gentle decline in net
interest margin evidenced in the first half of the year. As growth in real
estate-secured lending continued to contribute the majority of net lending
growth, competitive pricing in the UK and mix change in the US more towards
near-prime customers accentuated the margin impact. Additionally, continuing low
interest rates in Hong Kong constrained the value of excess deposits, and rising
short term interest rates in the US and in the UK squeezed margins on fixed
price consumer assets. This notwithstanding, volume growth in total offset
margin decline in the third quarter, after adjusting for the impact of currency
translation.

As credit expansion has remained concentrated in the personal sector in areas
where employment trends have continued to be positive, credit quality has
remained strong. Notably in the United States we continue to benefit from steady
improvement in delinquency, bankruptcy, restructuring and collection trends.
Although there is beginning to be some evidence of weaker consumer credit
experience in the UK following interest rate rises, credit costs are still
adequately covered by related margins. Experience in Hong Kong remains
consistent with the first half of the year.

Globally, corporate credit loss experience has remained low, both in the small
business and the large corporate segments.

Fees and commissions were in line with the first half of the year and ahead of
history driven by continuing sales of investment product and insurance in Asia,
together with strong trade-related revenues in Asia, continued growth in credit
card fees in all of our major markets and higher account services fees in the
United Kingdom.

Trading revenues in the third quarter were ahead of both the preceding quarter
and the prior year comparative quarter but were below the run rate of the first
half because of the exceptional results achieved in the first quarter. Market
conditions were less favourable for trading activities as volatility declined
and bond activity was weaker as interest rates rose and yield curves flattened.

Cost efficiency remains a major focus for the remainder of 2004 and for our 2005
plans. The cost:income ratio was modestly higher in the third quarter largely 
reflecting changes in business mix and seasonal factors. The trend of
cost efficiency improvement in the United Kingdom continued. The build up of
cost in Corporate, Investment Banking and Markets remained in line with the
planned development of the scale and scope of the business; hiring of senior
bankers and markets professionals is now substantially complete. The burden of
increased regulatory and legal requirements, including preparation for the
introduction of International Accounting Standards in 2005, the Basel 2
risk-capital framework, and preparation for Sarbanes-Oxley reporting in 2006 are
adding incrementally to overhead costs.

Business integration of recent acquisitions continued to proceed well. The Bank
of Bermuda integration is on track to complete by the first quarter of next year
and projected benefits are running ahead of the acquisition business case.
Household re-branded successfully as HSBC and is continuing to lend support to
consumer finance activities globally. The Whirl credit card system was
successfully implemented in Mexico and the US in the third quarter and the UK
project is on track to complete in the first half of 2005. The acquisition of
the Marks & Spencer private credit card business was successfully closed on 9
November 2004. In China the working relationship with Bank of Communications
continues to develop successfully.

The outlook into 2005 remains challenging to predict given the continuing
uncertainty over how the global imbalances referred to in our interim results
release will be resolved and over what time-scale. However these play out,
HSBC's broad-based business and geographic diversification is placing the Group
in a unique position to deliver profitable organic growth through leveraging the
Group's skill-base and customer relationships across both emerging and mature
markets. In the event of unforeseen economic developments, HSBC's resilience is
underpinned by the fact that HSBC's risk appetite remains focussed in areas of
comparative advantage, as well as our strong capital position and liquidity.

HSBC's results for the year ending 31 December 2004 will be announced on Monday,
28 February 2005.

A copy of HSBC's SEC filing summarising the significant differences applicable
to HSBC between UK GAAP and IFRS can be downloaded from HSBC's website by
following this link http://www.hsbc.com/hsbc/investor_centre/financial-results.

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.





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