HSBC USA Inc 3Q00 Results

HSBC Hldgs PLC
31 October 2000

                             
                                    
                        HSBC USA INC.
           THIRD QUARTER 2000 RESULTS - HIGHLIGHTS
                              
                              
* Net income in the third quarter of 2000 up 53.7 per cent to
  US$177 million from US$115 million in the third quarter of
  1999.

* Cash earnings^ in the third quarter up 91.7 per cent to
  US$236 million from US$123 million for the same period last
  year.

* Cost:income ratio (excluding goodwill amortisation and
  restructuring costs) of 51.2 per cent compared to 46.7 per
  cent in the third quarter of 1999.

* Tier 1 capital to risk-weighted assets increased to 12.8 per
  cent from 9.7 per cent at the end of the third quarter of
  1999 and decreased from 13.4 per cent at year-end 1999.

* Cash earnings^ as a percentage of average common equity were
  10.0 per cent compared to 21.3 per cent during the third
  quarter of 1999.

* Off-balance-sheet funds under management of US$47.3 billion.

^ Cash earnings are primarily net income after preferred
  dividends and after adding back goodwill amortisation.

HSBC USA Inc.                            Financial commentary

HSBC USA Inc. recorded net income of US$177 million for the
quarter ended 30 September 2000, up 53.7 per cent from US$115
million in the third quarter of 1999. Cash earnings were
US$236 million for the third quarter, compared to US$123
million in the same period in 1999.

HSBC USA Inc. completed the acquisition of Republic New York
Corporation on 31 December 1999. This acquisition was the
principal reason for the growth in earnings and increase in
balance sheet compared to 30 September 1999.

Youssef Nasr, chief executive officer of HSBC USA Inc., said:
'We are pleased with the results we have reported today. Cash
earnings once again exhibited strong growth as the
integration of Republic and HSBC USA continues to move
forward, both ahead of schedule and with lower levels of
restructuring costs than previously expected. We have created
a business that is stronger and better positioned to take
advantage of the opportunities that lie ahead. We now move
into what will certainly be an exciting time, as we celebrate
the Group's 150th anniversary of banking in the United
States.

'Our constant aim is to provide the highest quality customer
service in the banking industry. We are proud to have been
recognised by several prestigious financial publications for
providing superior customer service while at the same time
maintaining our high level of operating efficiency.'

Internet banking continues to be an area of rapid growth for
HSBC USA Inc. Over 43,000 accounts have been opened since its
introduction in April this year, more than 23,000 in the
third quarter alone.

Revenues from domestic wealth management were strong at US$51
million for the third quarter of 2000, up 19.6 per cent
compared to the combined results of the two organisations for
the same period last year. There was an increase in off-
balance-sheet assets under management of 10.8 per cent since
31 December 1999. Life insurance revenues for the nine months
ended 30 September more than doubled compared to the same
period in 1999. Total customer holdings for International
Private Banking (New York, Florida and California) increased
by more than 13.9 per cent compared to 31 December 1999.
There was some deterioration in the quality of more leveraged
credits, but reserves at 1.4 per cent of total loans and
provision levels were adequate.

Total loans at 30 September 2000 were US$39.2 billion, up
66.7 per cent from US$23.5 billion at 30 September 1999 and
compared to US$37.9 billion at 31 December 1999. Total
deposits were US$55.2 billion at 30 September 2000, up 106.3
per cent from US$26.7 billion at 30 September 1999 and
US$56.4 billion at 31 December 1999. Total assets were
US$87.1 billion compared to US$34.4 billion at 30 September
1999 and US$90.2 billion at 31 December 1999. Certain
overseas operations of the former Republic New York
Corporation have been transferred to other members of the
HSBC Group. More transfers are expected to occur later this
year.

Common equity was US$9.5 billion at 30 September 2000
compared to US$2.4 billion at 30 September 1999 and US$9.5
billion at 31 December 1999. As a percentage of total assets,
common equity increased to 10.9 per cent from 6.8 per cent at
30 September 1999 and 10.6 per cent at 31 December 1999. The
ratio of tier 1 capital to risk-weighted assets was 12.8 per
cent compared to 9.7 per cent at 30 September 1999 and 13.4
per cent at 31 December 1999. The ratio of total capital to
risk-weighted assets was 14.2 per cent compared to 13.6 per
cent at 30 September 1999 and 15.5 per cent at 31 December
1999. Capital ratios of HSBC USA Inc., including the flagship
bank, HSBC Bank USA, were high compared to peers.

The return on average common equity for the third quarter of
2000 was 7.3 per cent compared to 19.9 per cent in the third
quarter of last year. This was significantly affected by the
amortisation of goodwill through the income statement and the
substantial increase in common equity. The ratio of cash
earnings to common equity was 10.0 per cent compared to 21.3
per cent at 30 September 1999.

During the third quarter, HSBC USA Inc. formed the charitable
foundation, HSBC in the Community (USA) Inc. The foundation
will provide funding for a broad range of both educational
and environmental activities in the United States.

New York-based HSBC USA Inc. is the 13th largest US bank
holding company by total assets and is the holding company
for HSBC Bank USA; Republic Bank California N.A. and the HSBC
Group's interest in the Wells Fargo HSBC Trade Bank. HSBC has
more than 430 branches in New York, seven branches in
Florida, two in Pennsylvania and three in California. For
more information about HSBC Bank USA, visit
www.banking.us.hsbc.com.

HSBC USA Inc. is an indirectly-held, wholly-owned subsidiary
of HSBC Holdings plc (NYSE:HBC) which is headquartered in
London. 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.


HSBC USA Inc.                                          Quarterly summary

                             Quarter ended              Year to date
Figures in US$ millions    30 Sept      30 Sept      30 Sept     30 Sept
                              2000         1999         2000        1999

Net income                     177          115          504         350 
                                                                        
Cash earnings^                 236          123          680         376 
                                                                        
Performance ratios                                                      
Cash earnings as a                                                      
  percentage of                                                         
  average common equity       10.0%        21.3%         9.7%       22.3%
Cost:income ratio                                                       
  (excluding goodwill                                                   
  amortisation and                                                      
  restructuring costs)        51.2%        46.7%        52.7%       46.3%
Staff numbers (full-time                                                
  equivalents)                                        14,214       9,040 
                                                                        
Average balances                                                        
Loans                       38,497       23,242       38,071      23,330 
Earning assets              74,759       32,029       74,796      31,817 
Total assets                85,058       34,228       85,207      34,040 
Deposits                    54,658       26,678       54,264      26,447 
Common equity                9,393        2,295        9,401       2,225 
                                                                        
Net yields on total assets                                              
  (tax equivalent basis)       2.6%         3.6%         2.6%        3.6%
                                                                        
Capital (at end of period)                                              
Common equity                                          9,514       2,353 
As a percentage of total                                                
  assets                                                10.9%        6.8%

Capital ratios (%)                                                      
Leverage ratio                                           8.9         7.2 
Tier 1 capital to risk-                                                 
  weighted assets                                       12.8         9.7 
Total capital to risk-                                                  
  weighted assets                                       14.2        13.6 
                                                                        

^   Cash earnings are primarily net income after preferred
dividends and after adding back goodwill amortisation.


HSBC USA Inc.                          Consolidated statement of income

                                      Quarter ended       Quarter ended
Figures in US$ thousands               30 Sept 2000        30 Sept 1999
Interest income                                                  
Loans                                       764,915             456,846 
Securities                                  431,193              50,308 
Trading assets                               37,892              13,327 
Other short-term investments                131,406              59,601 
Total interest income                     1,365,406             580,082 
                                                                 
Interest expense                                                 
Deposits                                    594,554             215,591 
Short-term borrowings                       110,644              31,325 
Long-term debt                              100,951              27,657 
Total interest expense                      806,149             274,573 
                                                                 
Net interest income                         559,257             305,509 
Provision for credit losses                  29,000              22,500 
Net interest income, after                                       
  provision for credit losses               530,257             283,009 
                                                                 
Other operating income                                           
Trust income                                 20,776              12,554 
Service charges                              42,834              33,205 
Mortgage banking revenue                      7,739               6,086 
Other fees and commissions                   71,778              41,933 
Trading revenues                             29,337               1,801 
Security gains                               11,706                 (65) 
Earning from equity investments:                                 
- Share of earnings                          30,676                 991 
- Less amortisation of share of                                  
  affiliates goodwill                       (20,100)                  - 
                                             10,576                 991 
Other income                                 27,526              11,605 
Total other operating income                222,272             108,110 
                                                                 
Total income from operations                752,529             391,119 
                                                                 
Other operating expenses                                         
Salaries and employee benefits              243,343             110,011 
Occupancy expense, net                       42,304              23,051 
Other expenses                              147,885              60,303 
Operating expenses before goodwill                               
  amortisation                              433,532             193,365 
Goodwill amortisation                        44,417               6,994 
Total operating expenses                    477,949             200,359 
Income before taxes                         274,580             190,760 
Income tax expense                           98,000              75,780 
Net income                                  176,580             114,910 
                                                                 
Preferred dividends                           6,952                   - 
                                                                 
Net income available to common                                   
shareholders                                169,628             114,910 


HSBC USA Inc.                          Consolidated statement of income

                                         Year to date      Year to date 
Figures in US$ thousands                 30 Sept 2000      30 Sept 1999 
Interest income                                                    
Loans                                       2,214,727         1,379,579 
Securities                                  1,285,448           163,009 
Trading assets                                 90,285            35,824 
Other short-term investments                  406,969           152,918 
Total interest income                       3,997,429         1,731,330 
                                                                   
Interest expense                                                   
Deposits                                    1,689,280           625,455 
Short-term borrowings                         333,967           101,076 
Long-term debt                                317,271            81,104 
Total interest expense                      2,340,518           807,635 
                                                                   
Net interest income                         1,656,911           923,695 
Provision for credit losses                    85,000            67,500 
Net interest income, after provision for                           
  credit losses                             1,571,911           856,195 
                                                                   
Other operating income                                             
Trust income                                   63,319            38,662 
Service charges                               129,515            92,914 
Mortgage banking revenue                       22,903            26,076 
Other fees and commissions                    225,468           122,972 
Trading revenues                              111,080             7,277 
Security gains                                 12,451             7,241 
Earning from equity investments:                                   
- Share of earnings                           103,402             2,783 
- Less amortisation of share of affiliates                         
  goodwill                                    (60,300)                - 
                                               43,102             2,783 
Other income                                   48,933            40,680 
Total other operating income                  656,771           338,605 
                                                                   
Total income from operations                2,228,682         1,194,800 
                                                                   
Other operating expenses                                           
Salaries and employee benefits                745,684           319,421 
Occupancy expense, net                        128,971            67,314 
Other expenses                                422,594           197,637 
Operating expenses before goodwill                                 
  amortisation                              1,297,249           594,372 
Goodwill amortisation                         131,878            26,347 
Total operating expenses                    1,429,127           610,719 
Income before taxes                           799,555           584,081 
Income tax expense                            295,800           234,250 
Net income                                    503,755           349,831 
                                                                   
Preferred dividends                            20,821                 - 
Net income available to common shareholders   482,934           349,831 
                                                                   


HSBC USA Inc.                                Consolidated balance sheet

                                         At 30 Sept  At 31 Dec  At 30 Sept 
Figures in US$ thousands                       2000       1999        1999 
                                                                             
Assets                                                                       
Cash and due from banks                   2,029,872  1,977,756     866,729 
Interest bearing deposits with banks      6,557,518  4,234,668   2,291,434 
Federal funds sold and securities                                            
  purchased under resale agreements       2,629,177  2,318,361   2,141,850 
Trading assets                            5,276,584  4,526,988     979,022 
Securities available for sale            18,072,186 25,973,805   3,308,207 
Securities held to maturity               4,486,292  4,811,695           - 
                                                                             
Loans                                    39,247,169 37,909,143  23,540,623 
Less allowance for credit losses            558,337    659,603     368,269 
Loans, net                               36,688,832 37,249,540  23,172,354 
                                                                             
Premises and equipment                      753,565    745,910     197,756 
Accrued interest receivable                 877,600    778,363     211,102 
Equity investments^                       2,581,682  2,540,927      28,043 
Goodwill and other acquisition                                               
  intangibles                             3,254,459  3,307,147     325,777 
Other assets                              1,856,658  1,774,459     854,290 
                                                                             
Total assets                             87,064,425 90,239,619  34,376,564 
                                                                             
Liabilities                                                                  
Deposits in domestic offices                                                 
- Non-interest bearing                    5,626,408  6,003,813   2,848,582 
- Interest bearing                       29,641,450 29,393,957  19,125,207 
Deposits in foreign offices                                                  
- Non-interest bearing                      247,698    187,099           - 
- Interest bearing                       19,636,623 20,865,022   4,758,157 
Total deposits                           55,152,179 56,449,891  26,731,946 
Trading account liabilities               2,272,295  2,440,729      56,327 
Short-term borrowings                    10,434,549   ,271,597   2,582,581 
Interest, taxes and other liabilities     3,489,826  3,059,993     806,954 
Payable to shareholders of acquired                                          
  Company                                         -  7,091,209           - 
Subordinated long-term debt               3,323,624  3,427,649     822,535 
Guaranteed mandatorily redeemable                                            
Securities                                  711,368    710,259     400,000 
Other long-term debt                      1,666,760  1,747,131     623,341 
                                                                             
Total liabilities                        77,050,601 80,198,458  32,023,684 
                                                                             
Shareholders' equity                                                         
Preferred stock                             500,000    500,000           - 
Common shareholders' equity               9,513,824  9,541,161   2,352,880 
Total shareholders' equity               10,013,824 10,041,161   2,352,880 
                                                                             
Total liabilities and shareholders'                                          
  equity                                 87,064,425 90,239,619  34,376,564 

^Principally 49 per cent ownership interest in HSBC Republic
 Holdings (Luxembourg) S.A. formerly called Safra Republic
 Holdings S.A., including goodwill of US$1.6 billion.