SABB Q1 2007 Results

HSBC Holdings PLC
10 April 2007

The following news release was issued today by The Saudi British Bank (SABB), a 
40 per cent indirectly-held associate of HSBC Holdings plc.                             
                            
                            THE SAUDI BRITISH BANK
                    FIRST QUARTER 2007 RESULTS - HIGHLIGHTS

• Net profit of SAR616 million (US$164 million) for the three months ended
  31 March 2007 - down SAR370 million (US$99 million), or 37.5 per cent,
  compared with SAR986 million (US$263 million) for the same period in 2006.

• Operating income of SAR1,028 million (US$274 million) for the three
  months ended 31 March 2007 - down SAR393 million (US$105 million), or
  27.7 per cent, compared with SAR1,421 million (US$379 million) for the
  same period in 2006.

• Customer deposits of SAR59.8 billion (US$15.9 billion) at 31 March 2007 - up 
  SAR5.3 billion (US$1.4 billion), or 9.7 per cent, compared with SAR54.5 
  billion (US$14.5 billion) at 31 March 2006.

• Loans and advances to customers of SAR42.7 billion (US$11.4 billion) at 
  31 March 2007 - up SAR3.2 billion (US$0.9 billion), or 8.1 per cent, from 
  SAR39.5 billion (US$10.5 billion) at 31 March 2006.

• The bank's investment portfolio totalled SAR17.6 billion (US$4.7 billion)
  at 31 March 2007 compared with SAR18.3 billion (US$4.9 billion) at 
  31 March 2006.

• Total assets of SAR79.5 billion (US$21.2 billion) at 31 March 2007 - up 
  SAR5.8 billion (US$1.5 billion), or 7.9 per cent, over 31 March 2006.

• Earnings per share of SAR1.64 (US$0.44) for the three months ended 
  31 March 2007 - down 37.5 per cent from SAR2.63 (US$0.70) for the same 
  period in 2006.

Commentary

SABB recorded a net profit of SAR616 million (US$164 million) for the three
months ended 31 March 2007. This represents a 37.5 per cent decline compared
with the first quarter of 2006. Compared with the fourth quarter of 2006, however,
net profit in the first quarter of 2007 increased 5.3 per cent.

John Coverdale, managing director of SABB, said: "During the first quarter of
2007, SABB has successfully concentrated on strengthening its core banking
businesses and customer service infrastructure. Although we have not been able
to match the high levels of profits seen in the first three months
of 2006, the bank achieved a SAR31 million increase in profits compared to the 
fourth quarter of 2006. This growth demonstrates the underlying momentum that 
SABB has maintained and will build upon during the rest of 2007.

"Operating income for the quarter, compared with the same period in 2006, was 
down 27.7 per cent as a result of significantly lower fees from brokerage and 
mutual fund business, although this was offset by improved balance sheet driven 
income, including higher levels of loans and deposits. SABB's cost base was 
SAR62 million, or 16.0 per cent, lower than the first quarter of 2006, reflecting 
last year's investment in the SABB/Hexagon re-branding, systems improvements and
staffing initiatives which are now helping to generate growth momentum.

"We have continued to grow our card and consumer loan book, and loan provisions 
have increased commensurately.  However, overall credit quality remains sound. 
The very liquid market conditions have kept deposit levels high and SABB's 
challenge for 2007 will be to ensure that these funds are channelled towards 
further quality asset growth. The bank's capital and liquidity positions remain 
strong.

"Following the grant of an insurance operating licence in 2006, we are pleased 
that the SABB Takaful initial public offering has been so well received. Once 
fully operational, the company will offer a comprehensive range of Shariah-
compliant Takaful products for personal and corporate customers and will 
represent a key step in SABB's evolution into a financial services group.

"We thank our customers for their continued support, and our staff for their 
commitment and contribution to the bank's success."

                            





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