HSBC subsid 1Q02 Results

HSBC Holdings PLC
8 May 2002


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

              HSBC TRINKAUS & BURKHARDT FIRST QUARTER 2002 RESULTS

                 operating profits fell, but corporate banking

                     performed well despite market weakness

HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly owned
by HSBC Holdings plc, reported lower profits for the first quarter of 2002 than
in the same period of 2001, due to the unsettled economic conditions and weak
sentiment in the German and international financial markets. Operating profits
declined by 50.9 per cent to EUR14.4 million and net profits after tax by 69.5
per cent to EUR9.1 million. The first quarter 2001 results included an
exceptional gain from the disposal of all but a minority of the shares in S
Broker AG (formerly pulsiv AG). Earnings per share, at EUR0.35, were 65.0 per
cent below the corresponding figure of the previous year.

Profits generated from client business remained good, not least as a result of
the growth in earnings from corporate banking. This was, however, offset by a
severe decline in profits on proprietary trading activities. Net interest income
increased by 3.9 per cent to EUR18.6 million. Owing to a conservative lending
policy, the adverse effects of the poor economic conditions on corporate
customers remained entirely manageable. Without any relaxation of strict
criteria, net new lending provisions were held steady at EUR0.2 million, the
same level as in the first quarter of 2001.

Net fees and commissions fell by 6.7 per cent to EUR48.6 million. The main
reason was the reduction of EUR2.7 million in fees from new issues. Proprietary
trading results, which suffered the most from weak activity on securities
markets, were an unsatisfactory EUR2.1 million, compared with EUR18.2 million in
the same period of the previous year. However, the performance of individual
trading areas was very disparate. Equities-related trading reported profits of
EUR1.7 million, against the background of low turnover on stock exchanges.
However, dealing in bonds and interest rate derivatives recorded a loss of
EUR3.3 million. FX trading profits of EUR3.7 million were in line with
expectations. Operating expenses fell by 5.3 per cent to EUR55.5 million.

HSBC Trinkaus & Burkhardt achieved pre-tax profits of EUR14.9 million. Net
profits after tax and minority interests, at EUR9.1 million, were 65.3 per cent
lower than in the first quarter of 2001.

Consolidated assets fell in comparison with the year-end 2001 by 1.1 per cent to
EUR10.9 billion. The total capital base at 31 March 2002 was 11.4 per cent of
risk-weighted assets according to BIS rules. The core capital ratio was 7.5 per
cent.

The Managing Partners, in their outlook for the rest of the year, reiterate the
caution they expressed when announcing the 2001 annual results, and emphasise
that the German banking industry faces considerable challenges in 2002. The
economic situation remains fragile. Pressure on the bank's results will only be
alleviated by a revival in general economic conditions and an improvement in
sentiment in the capital markets. Such an economic upturn, combined with strict
cost control, should lead to an improvement in profitability in the second half.
The Managing Partners continue to expect that in 2002 it will be possible to pay
a basic dividend of EUR1.75, the same as last year.



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