HSBC German subsid interims

HSBC Holdings PLC
31 July 2003

The following text is the English translation of a news release issued in
Germany by HSBC Holdings plc's subsidiary.

                      HSBC TRINKAUS & BURKHARDT INCREASES

                   INTERIM OPERATING PROFITS BY 49.3 PER CENT

HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly owned
by HSBC Holdings plc, reported substantially higher operating profits for the
first six months of 2003 compared to the same period last year. Profits
increased by 49.3 per cent from EUR 28.4 million to EUR 42.4 million, despite
unfavourable economic conditions in Germany, which depressed the profitability
of the banking sector.

The positive profits trend established in the first quarter accelerated in the
second. Operating profits in the first quarter of 2003 rose by 25.0 per cent to
EUR 18.0 million compared to EUR 14.4 million in the same period in 2002. In the
second quarter, again compared to 2002, profits increased by 74.3 per cent to
EUR 24.4 million. Net profit after tax increased in the first half of 2003
compared to the same period last year by 18.5 per cent to EUR 21.1 million, and
profit per share rose by 19.1 per cent to EUR 0.81 per share.

Four main factors contributed to this pleasing development in the first half of
2003:

* Excellent trading results: trading profits increased strongly from EUR 7.9
million to EUR 27.4 million. Both interest rate and equities trading contributed
to this increase. Particularly successful was equities derivatives trading,
whose contribution to operating profits, against the background of generally
weak and unsettled stock markets, significantly exceeded expectations. Foreign
exchange reported a small loss.

* Robust client business: Corporate Banking again delivered the best
contribution of all client divisions, although not quite reaching the high level
of the same period last year. In the two client divisions particularly affected
by developments on financial markets, namely in Private Banking and
Institutional Investors, the picture was variable but satisfactory overall.
Private Banking increased its contribution slightly compared to the first six
months of 2002, and in the second quarter of 2003 compared to the first quarter.
Institutional Investors improved in the second quarter of 2003 compared to the
first quarter, but overall in the first half of 2003 could not repeat the good
results of the same period in 2002. Net income from fees and commissions in the
first six months of 2003 fell by 3.9 per cent to EUR 93.4 million, while net
interest income rose by 10.2 per cent to EUR 37.9 million.

* Strict cost control: the cost control measures introduced last year showed
their effects in a reduction of other administrative expenses by 3.5 per cent to
EUR 33.3 million. These measures continue to be rigorously pursued, adjusting
capacity to match reduced business volumes where necessary. Higher
profit-related remuneration, however, led to an increase in total administrative
expenses of 3.2 per cent, to EUR 115.5 million.

* Efficient credit risk management: the economic situation remains difficult for
many German firms. There is no sign of a drop in the rate of company
insolvencies, and consequently no relief from pressure on the credit risk front.
In this context, net new lending provisions of EUR 2.5 million continue to run
at a very modest level. The bank has avoided major defaults, thanks to a
conservative credit policy and strict standards when taking on credit risks.

Compared to 31 December 2002, total assets increased by 4.8 per cent to EUR
11.67 billion. The BIS capital ratio at 30 June 2003 was 11.1 per cent; the core
capital ratio 7.9 per cent.

The Managing Partners look forward with confidence to the second half of the
year. The key will be to hold fast to the chosen strategy, with a clear focus on
the sophisticated requirements of the bank's three target client groups:
corporate clients, high net worth private clients and institutional investors.
The extent of the expected improvement, however, will depend on a sustained
recovery in stock market conditions, owing to the high proportion of commission
and trading-related income in the total revenues of the bank. Particular
importance is attached to consistently prudent credit risk management, in order
to limit credit risk costs. Subject to these conditions, the Managing Partners
expect to reach their profit targets. The bank's shareholders would then share
in those higher profits, in line with its results-oriented dividend policy.


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