HSBC Subsidiary Results

HSBC Hldgs PLC
30 January 2001

                       HSBC BANK CANADA
                   2000 RESULTS - HIGHLIGHTS


*  Income before taxes and non-controlling interest in income of
   subsidiaries was C$347 million for the year ended 31 December
   2000, an increase of 42.2 per cent over 1999.

*  Net income was C$184 million for the year ended 31 December
   2000, an increase of 11.5 per cent over 1999.

*  Return on average common equity of 15.3 per cent for the year
   ended 31 December 2000 compared to 18.4 per cent in 1999.

*  Total assets of C$29.4 billion at 31 December 2000 (C$25.1
   billion at 31 December 1999).

*  Total capital ratio of 11.5 per cent and tier 1 capital ratio
   of 8.6 per cent at 31 December 2000 (10.9 per cent and 7.9 per
   cent at 31 December 1999).

*  Funds under management of C$10.2 billion at 31 December 2000
   (C$10.2 billion at 31 December 1999) after the transfer out of
   C$1.8 billion resulting from the sale of HSBC InvestDirect
   (Canada) Inc in the fourth quarter.

HSBC Bank Canada                                        Highlights
 

HSBC Bank Canada reports income before taxes and non-
controlling interest in income of subsidiaries of C$347 million

HSBC Bank Canada recorded income before taxes and non
controlling interest in income of subsidiaries of C$105 million
for the three months ended 31 December 2000, an increase of
C$41 million or 64.1 per cent from the same quarter in 1999.
Income before taxes and non-controlling interest in income from
subsidiaries for the year ended 31 December 2000 was C$347
million, an increase of C$103 million or 42.2 per cent over
1999.

Net income was C$40 million for the three months ended 31
December 2000, down 4.8 per cent from the same quarter in 1999.
Net income for the year ended 31 December 2000 was C$184
million, up 11.5 per cent over 1999. Return on equity was 12.1
per cent for the three months ended 31 December 2000, compared
to 17.3 per cent in the fourth quarter of 1999. For the year
ended 31 December 2000, return on equity was 15.3 per cent
compared to 18.4 per cent for 1999.

Return on equity for the three months and year ended 31
December 2000 was lower than comparative periods in 1999 as a
result of the increased capital base in 2000, due to regulatory
requirements to increase capital ratios, and higher provision
for income taxes. The fourth quarter included a C$12 million
charge to reduce the value of future income tax assets. This was
made as a result of lower future corporate income tax rates that
were announced in the October 2000 federal budget. Excluding the
additional charge of C$12 million, return on equity would have
been 15.8 per cent for the quarter and 16.3 per cent for the
year ended 31 December 2000.

The cost:income ratio (excluding the impact of amortisation of
goodwill and intangible assets) for the three months ended 31
December 2000 improved to 61.0 per cent compared to 69.9 per
cent in the fourth quarter of 1999. For the twelve months ended
31 December 2000 the cost:income ratio was 65.2 per cent
compared to 68.8 per cent for 1999.

Martin Glynn, president and chief executive officer, said: 'Our
results for the quarter and the year were in line with
expectations and showed strong growth in pre tax income.
Despite slower commercial loan growth and weaker equity markets
in the fourth quarter, income before taxes and non-controlling
interest in income from subsidiaries increased by 16.7 per cent
from the third quarter of 2000 and 64.1 per cent from the
fourth quarter in 1999.

'Our emphasis on improving operational efficiency and
controlling expenses continued to show positive results, as
demonstrated through an improved cost:income ratio.'

'In the fourth quarter HSBC InvestDirect was transferred to
Merrill Lynch HSBC (www.mlhsbc.ca), which launched in December 2000.
We are excited at the prospects for this company to provide award
winning research and excellent sharedealing service, on line
and by phone, to increasing numbers of investors.'

'In 2001 we will continue to organize our business around our
customers to anticipate and meet their needs. We have an
excellent team of employees who will continue to work to
deliver a 'world of financial services' to our customers.'


HSBC Bank Canada                              Financial Commentary
 

Net interest income

Net interest income for the fourth quarter of 2000 was C$179
million, an increase of C$38 million, or 27.0 per cent, over
the fourth quarter of 1999. For the year ended 31 December
2000, net interest income was C$666 million, an increase of
C$126 million, or 23.3 per cent over 1999. Continued growth in
interest earning loans, especially in commercial advances,
helped boost year-on-year performance. In addition, the
acquisition of Republic National Bank of New York (Canada)
('Republic Canada') at the beginning of the second quarter
added C$974 million in loans.

Increases in prime and base lending rates, increased
contribution from loan fees and lower funding costs helped
increase the net interest margin in 2000. Net interest margin,
as a percentage of average interest earning assets, increased
to 2.73 per cent in the fourth quarter of 2000 compared to 2.41
per cent for the comparable period in 1999. On a year-to-date
basis, the net interest margin for 2000 was 2.68 per cent
compared to 2.32 per cent in 1999. The lower funding costs were
primarily due to less reliance being placed on wholesale
deposits, which are more costly than personal retail deposits,
in 2000 compared to 1999. In addition, a capital re structuring
in December 1999 eliminated C$4 million of subordinated
interest expense per quarter in 2000.

Other income

Other income was C$113 million in the fourth quarter of 2000,
an increase of C$18 million, or 18.9 per cent, over the fourth
quarter of 1999. For the year ended 31 December 2000, other
income was C$462 million, an increase of C$78 million, or 20.3
per cent, over the comparative period in 1999.

Favourable market conditions, particularly in the first six
months of the year, resulted in income from investment and
securities services increasing by C$67 million, or 46.9 per
cent, to C$210 million when compared to 1999. This was
partially offset by a lower level of trading revenue due to a
lower contribution from structured equity trading operations.

Non-interest expenses

Non-interest expenses were C$180 million in the quarter ended
31 December 2000 compared to C$165 million for the same period
in 1999. For the twelve months ended 31 December 2000, non-
interest expenses were C$742 million, an increase of C$105
million over the comparative period in 1999. The higher
salaries and employee benefits and other non-interest expenses
were largely due to the growth in performance-based
compensation and volume-driven transaction expenses. Both of
these expense items are associated with the increases in other
income.


Credit quality and provision for credit losses

The provision for credit losses was C$7 million for the fourth
quarter of 2000 and C$39 million for the year ended 31 December
2000. This compared to C$7 million and C$43 million,
respectively, for the same periods in 1999. Despite an increase
in the overall volume of interest earning assets, credit
quality remains strong. The provision for credit losses, as a
percentage of average loans and bankers acceptances, has
improved 0.04 per cent to 0.18 per cent for the year ended 31
December 2000 compared to 1999. The allowance for credit losses
exceeded gross impaired loans by C$111 million at 31 December
2000 compared to C$104 million at 31 December 1999.

Provision for income taxes

The effective tax rate for the fourth quarter of 2000 was 60.4
per cent and 45.7 per cent for the year ended 31 December 2000.
In the fourth quarter of 2000 an additional income tax
provision of C$12 million was made. This resulted from the
announcement by the federal government of lower corporate
income tax rates for the next four years in the October 2000
budget, which reduced the value of future income tax assets.
Excluding the additional expense the effective tax rates would
have been 48.5 per cent and 42.2 per cent, respectively, for
the quarter and year ended 31 December 2000. Additionally,
decreases in non-taxable income and other deductions available
for utilisation during 2000 increased the effective tax rate
when compared to 1999.

Balance sheet

Total assets grew by C$4.4 billion, or 17.5 per cent, to C$29.4
billion at 31 December 2000. Loans increased by C$2.6 billion,
of which approximately C$1.0 billion was from the acquisition
of Republic Canada. This increase, primarily in commercial
accounts, combined with an underlying increase in bankers'
acceptances of C$429 million, reflected the strength in the
Canadian economy.

Funds under management

Funds under management were C$10.2 billion at 31 December 2000
after the transfer out of C$1.8 billion in the fourth
quarter due to the transfer of HSBC InvestDirect (Canada) Inc to
Merrill Lynch HSBC. Had it not been for the transfer, funds under
management would have been C$12.0 billion, an underlying
increase of C$1.8 billion or 17.6 per cent compared to 31
December 1999.

Capital

The bank's tier 1 capital ratio was 8.6 per cent and the total
capital ratio was 11.5 per cent as at 31 December 2000.


Related party transaction

On 29 November 2000 the bank sold to an affiliate its 100 per cent
interest in HSBC InvestDirect(Canada) Inc for a cash consideration
of C$110 million. The business was then transferred to
Merrill Lynch HSBC. The resulting gain of C$88 million, net of
tax, was credited directly to retained earnings as it arose from
a transaction with an affiliate.

Subsequently HSBC InvestDirect (Canada) Inc changed its name to
Merrill Lynch HSBC Canada Inc, the Canadian subsidiary of
Merrill Lynch HSBC Holdings Ltd, a global online investment and
banking company.

Dividends

In November 2000 the bank paid a dividend of C$810 million on its
common shares and received proceeds of C$760 million on the issue
of additional common shares.

At its meeting on 26 January 2001, the Board of Directors
declared a regular dividend of 39.0625 cents per share on the
class 1 preferred shares - series A, payable on March 31, 2001
to shareholders of record on March 15, 2001. The dividend of
C$2.0 million will be paid in cash on April 2, 2001.

Shareholder information

HSBC Bank Canada, an indirectly-held, wholly-owned subsidiary
of HSBC Holdings plc, has more than 150 offices. With some
6,000 offices in 81 countries and territories and assets of
US$580 billion at 30 June 2000, the HSBC Group is one of the
world's largest banking and financial services organisations.



Copies of the Annual Report of HSBC Bank Canada will be sent to
shareholders during April 2001.

This news release may contain forward-looking statements,
including statements regarding the business and anticipated
financial performance of HSBC Bank Canada. These statements are
subject to a number of risks and uncertainties that may cause
actual results to differ materially from those contemplated by
the forward-looking statements. Some of the factors that could
cause such differences include legislative or regulatory
developments, competition, technological change, global capital
market activity, changes in government monetary and economic
policies, changes in prevailing interest rates, inflation
levels and general economic conditions in geographic areas
where HSBC Bank Canada operates.

HSBC Bank Canada                                             Highlights
 

                               Quarter ended            Year ended     
Figures in C$ millions        31        30        31         31       31 
  (except per share          Dec       Sep       Dec        Dec      Dec   
  amounts)                  2000      2000      1999       2000     1999 
                                                                              
                                                              
Earnings                                                               
Net interest income          179       171       141        666      540 
Income before taxes and non                                              
  controlling interest in                                                  
  subsidiaries               105        90        64        347      244 
                                         
Net income                    40        50        42        184      165 
Basic earnings per common                                                
  share                     0.09      0.15      0.15       0.52     0.59 
                                                                         
Financial ratios (%)                                                     
Return on average common                                                 
  equity                    12.1      17.0      17.3       15.3     18.4 
Return on average assets    0.50      0.65      0.64       0.60     0.63 
Net interest margin         2.73      2.67      2.41       2.68     2.32 
Cost:income ratio^          61.0      63.2      69.9       65.2     68.8 
Provision for credit                                                     
  losses/average loans                                                     
  and acceptances           0.12      0.18      0.15       0.18     0.22 
Other income/total income   38.7      38.3      40.0       41.0     41.6 
                                                                         
^  Excluding amortisation of goodwill and intangible assets.


                                                       At 31        At 31 
                                                         Dec          Dec
Figures in C$ millions                                  2000         1999 
                                                                            
Financial position                                                        
Total assets                                          29,438       25,051 
Total loans                                           19,753       17,130 
Total deposits                                        23,511       20,170 
Shareholders' equity                                   1,406        1,252 
                                                                          
Assets under administration                                               
Funds under management                                10,198       10,227 
Custodial assets under                                
  administration                                       2,500        2,786
                                                                          
Capital ratios (%)                                                        
Total capital                                           11.5         10.9 
Tier 1 capital                                           8.6          7.9 


HSBC Bank Canada         Consolidated Statement of Income (Unaudited)

                                                                         
                               Quarter ended            Year ended      
Figures in C$                                                    
  millions                    31        30         31          31          31
  (except share and per      Dec       Sep        Dec         Dec         Dec
  share amounts)            2000      2000       1999        2000        1999 
                                   
                                                                             
Interest and dividend                                                         
  income
Loans                        389        375       294         1,415     1,175 
Other                         95         89        82           349       318 
                             484        464       376         1,764     1,493 
                                                                              
Interest expense                                                              
Deposits                    (297)      (285)     (225)       (1,068)     (912)
Debentures                    (8)        (8)      (10)          (30)      (41)
                            (305)      (293)     (235)       (1,098)     (953)

                                                                              
Net interest income          179        171       141           666       540 
                                                                              
Provision for credit                                                          
  losses                      (7)       (10)       (7)          (39)      (43)
Net interest income                                                           
  after provision for                                                         
  credit losses              172       161        134           627       497 
                                                                              

Other income                 113        106        95           462       384 
                                                                              
Net interest and other                                                        
  income                     285        267       229         1,089       881 
                                                                              
Non-interest expenses                                                         
Salaries and employee                                                         
  benefits                   (92)       (92)      (88)         (385)     (339)
Premises and equipment       (25)       (26)      (24)         (108)     (101)
Other                        (63)       (59)      (53)         (249)     (197)
Total non-interest                                                            
  expenses                  (180)      (177)     (165)         (742)     (637)

                                                                              
Income before taxes and                                                       
  non-controlling                                                             
  interest in income of                                                       
  subsidiaries               105         90        64           347       244 
Provision for income                                                          
  taxes                      (61)       (36)      (22)         (155)      (79)
                                                                            
Non-controlling                                                             
  interest in income                                                          
  of subsidiaries             (4)        (4)        -            (8)        -
Net income                    40         50        42           184       165 
Preferred share                                                               
  dividends                   (2)        (2)        -           (15)        - 
                                                                              
Net income attributable                                                      
  to common shares            38         48        42           169       165 
                                                                            
Average common shares                                                       
  outstanding (000s)     417,342    322,559   280,168       325,305   280,168 

Basic earnings per                                                            
common share                0.09       0.15      0.15          0.52      0.59 


HSBC Bank Canada                 Condensed Consolidated Balance Sheet
                                                          (Unaudited)


                                                At 31          At 31 
                                             December       December
Figures in C$                                                   
  millions                                         2000         1999 
                                                                    
Assets                                                            
                                                                    
Cash and deposits with Bank                                       
  of Canada                                         375          341 
Deposits with regulated                                           
  financial institutions                          1,997        1,954 
                                                  2,372        2,295 
                                                                    
Investment securities                             2,840        2,437 
Trading securities                                  955          410 
                                                  3,795        2,847 
                                                                    
Assets purchased under                                            
  reverse repurchase                                                
  agreements                                        436          378 
                                                                    
Loans                                                             
Businesses and government                        11,330        9,634 
Residential mortgage                              6,809        5,769 
Consumer                                          1,899        2,014 
Allowance for credit losses                        (285)        (287) 
                                                 19,753       17,130 
                                                                    
Customers' liability under                                        
  acceptances                                     2,134        1,705 
Other assets                                        948          696 
                                                  3,082        2,401 
Total assets                                     29,438       25,051 
                                                                    
Liabilities and shareholders' equity                              
                                                                    
Deposits                                                          
Regulated financial                                               
  institutions                                     707        1,303 
Individuals                                     12,116       10,858 
Businesses and governments                      10,688        8,009 
                                                23,511       20,170 
                                                                    
Acceptances                                      2,134        1,705 
Assets sold under                                                 
  repurchase agreements                             15          179 
Other liabilities                                1,720        1,323 
Subordinated debt                                  422          392 
Non-controlling interest in                                       
  subsidiaries                                     230           30 
                                                 4,521        3,629 
                                                                    
Shareholders' equity                                              
  Preferred shares                                 125          270 
  Common shares                                    935           75 
  Contributed surplus                              165          165 
  Retained earnings                                181          742 
                                                 1,406        1,252 
                                                                    
Total liabilities and                                             
  shareholders' equity                          29,438       25,051 

  HSBC Bank Canada          Condensed Consolidated Statement of Cash
                                                               Flows
                                                         (Unaudited)
  

                                 Quarter ended         Year ended     
                              31          30        31          31       31 
                             Dec         Sep       Dec         Dec       Dec
Figures in C$               2000        2000      1999        2000      1999  
   millions                                                                   
                                                                              
                      
Cash flows (used in)                                                      
  from operating                                                            
  activities                (311)        (37)      (61)       (226)      221 
                                                  
                                                                            
Cash flows from (used                                                     
  in) financing               
  activities                 331         862       (436)     2,222      (464)
                                                                            
Cash flows from (used                                                     
  in) investing             
  activities                 327        (319)       244     (1,750)      899
                                                                           
Increase (decrease)                                                       
  in cash and             
  cash equivalents           347         506       (253)       246       656
Cash and cash                                                             
  equivalents,          
  beginning of period      1,991       1,485      2,345      2,092     1,436
Cash and cash                                                             
  equivalents,          
  end of period            2,338       1,991      2,092      2,338     2,092