HSBC signs MOU

HSBC Holdings PLC
28 June 2002

HSBC SIGNS MEMORANDUM OF UNDERSTANDING WITH CERTAIN PARTNERS OF ARTHUR ANDERSEN
                   LLP'S U.S. PRIVATE CLIENT SERVICE PRACTICE

Working with HSBC's Group Private Banking business, HSBC USA Inc has entered
into a memorandum of understanding with certain partners of Arthur Andersen
LLP's (AA LLP) U.S. Private Client Service Practice for such partners to join a
new HSBC Private Client Services Group in the U.S. serving the wealth and tax
advisory needs of high net worth individuals.

It has also entered into a memorandum of understanding with AA LLP relating to
the release of such partners and providing for the acquisition of certain assets
for a total consideration of approximately US$15 million. The proposed
transaction is subject to the completion of definitive legal documentation and
certain other conditions.

The professionals from AA LLP's U.S. Private Client Services Practice who will
be joining HSBC are recognised experts in the wealth and tax advisory field. The
new business will be a strategic and core initiative for HSBC's private banking
businesses both within HSBC USA Inc and across the Group.

Under the terms of the proposed transaction, a new company, Wealth and Tax
Advisory Services, Inc, will be formed which will be a wholly-owned subsidiary
of HSBC USA Inc. It will employ approximately 25 former partners and principals
of AA LLP and 180 other former AA LLP personnel. The firm will operate from the
following locations: New York City; Los Angeles, Orange County, and San
Francisco, California; Boston, Massachusetts; Vienna, Virginia; West Palm Beach,
Florida; and Charlotte, North Carolina.

Youssef A Nasr, President and CEO of HSBC USA Inc, commented, "Establishing this
business within HSBC USA Inc will allow us to provide added-value advisory
services to our private banking clients and will help the continued expansion of
our top-tier private banking operations, especially within the U.S.

"It has long been HSBC's stated strategy to develop our wealth management and
private banking business to better serve our clients. This high value-added,
fee-generating business fits exactly within that strategy, widening the scope of
services that we provide to our current and future clients."

Clive Bannister, Group General Manager and CEO of Group Private Banking,
welcomed the transaction as further evidence of the HSBC Group's commitment to
private banking, to North America, and to the provision of sophisticated advice
to high net worth individuals and their families. In order to serve clients
better, Group Private Banking has developed a number of global practices which
offer a comprehensive range of specialised products and services to high net
worth individuals. The new business will be part of this global effort.

Mark Vorsatz, CEO Designate of Wealth and Tax Advisory Services, Inc, added, "We
are looking forward to joining the HSBC Group. This strategic partnership will
allow us to provide enhanced services to both existing and new clients and
better fulfill their wealth management needs."



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