Interim Results - Part 2

HSBC HOLDINGS PLC
2 August 1999


PART TWO

The Group's credit experience in the first half of 1999 reflected the
different stages reached in the economic cycle throughout Asia. The
first half of 1998 was marked by significant provisions against
exposures to customers in Indonesia and Thailand, as was the second
half, although to a much lesser extent. Further provisioning
requirements against such exposures in the first half of 1999 were
approximately 10 per cent of the comparable charge in the first half of
1998.

In Malaysia, the deterioration in credit quality experienced in the
second half of 1998 continued and approximately 50 per cent of the bad
and doubtful debt charge in the Rest of Asia-Pacific related to
Malaysia. The other major deterioration seen in the first half of 1999
arose from certain exposures related to mainland China and just over 40
per cent of the provision charge booked in Hong Kong and the Rest of
Asia-Pacific, excluding Malaysia, was attributable to these exposures.
There are signs that asset quality in Hong Kong is stabilising and the
rate at which non-performing accounts were growing slowed in the second
quarter of 1999. In the UK and North America credit quality remained
stable.

In view of the continuing uncertain environment, the special general
provision of US$290 million raised in 1997 in respect of Asia remained
intact.

Non-performing customer advances during the first half of 1999
increased by US$950 million to US$9,821 million which represented 4.0
per cent of gross customer advances (31 December 1998: 3.7 per cent).

Customer loans and advances and provisions                            
                                                                         
                                                                         
                                           At            At          At
                                      30JUN99       30JUN98     31DEC98
                                                                       
Figures in US$m                                                          
                                                                       
Loans and advances to customers                                        
  (gross)                             243,985       247,537    242,489 
                                                                     
Residential mortgages                  61,751        61,678     62,212 
Hong Kong SAR Government Home                                          
  Ownership Scheme                      6,628         5,274      6,291 
Other personal                         25,299        24,724     25,732 
Total personal                         93,678        91,676     94,235 
Commercial, industrial and                                             
  international trade                  58,654        61,770     61,411 
Commercial real estate                 23,298        25,296     24,116 
Other property related                  8,515         7,643      8,249 
Government                              5,000         4,940      5,285 
Non-bank financial institutions        12,869        16,267     11,763 
Settlement accounts                     9,157         6,319      4,963 
Other commercial*                      32,814        33,626     32,467 
                                                                       
Half year profit and loss account                                        
                                                                         
Bad and doubtful debt charge            1,084         1,147      1,481   
                                                                         
As a percentage of closing gross                                         
  loans and advances (annualised)         0.9%          0.9%       1.2% 
                                                                         
Balance sheet                                                            
                                                                         
Specific provisions outstanding                                          
 against loans and advances             5,200         3,774      4,608   
                                                                         
Non-performing loans**                  9,821         6,504      8,871   
                                                                         
Specific provisions outstanding as                                       
 a percentage of non-performing                                            
 loans**                                 52.9%         58.0%      51.9% 
                                                                         
Non-performing loans as a                                                
 percentage of gross loans and                                           
 advances to customers**                  4.0%          2.6%       3.7% 
                                                                         

*  Includes advances in respect of Agriculture, Transport, Energy and
   Utilities.
** Net of suspended interest.

Country risk and cross-border exposure                                    
                          Brazil Indonesia  Malaysia     South   Thailand  
Figures in US$bn                                         Korea            

                                                                         
At 30 June 1999                                                          
In-country local currency                                                
obligations                  5.2      0.4        6.3       0.9       0.8 
                                                                         
In-country foreign                                                       
  currency obligations       0.3      0.9        0.8       1.0       0.6 
                                                                         
Net cross-border obligations 0.4      0.4        0.4       2.0       0.2 
                             0.7      1.3        1.2       3.0       0.8 
Claims under contracts in                                                
  financial derivatives      0.1        -          -         -         - 
                                                                         
Total exposure               6.0      1.7        7.5       3.9       1.6 
                                                                         
Figures in US$m                                                          
                                                                         
Non-performing customer                                                  
  loans*                     126      588        950         7       499 
                                                                         
Specific provisions                                                      
  outstanding                 82      443        550         5       333 
                                                                         
As at 30 June 1998                                                       
                                                                         
Figures in US$bn                                                         
                                                                         
Total exposure              10.2      1.5        6.1       3.9       2.3 
                                                                         
Figures in US$m                                                          
                                                                         
Non-performing customer                                                  
  loans*                      99      457        231        23       353 
                                                                         
Specific provisions                                                      
  outstanding                 50      319        121        21       214 
                                                                         
As at 31 December 1998                                                   
                                                                         
Figures in US$bn                                                         
                                                                         
Total exposure               9.2      1.4        7.4       3.6       2.3 
                                                                         
Figures in US$m                                                          
                                                                         
Non-performing customer      
  loans*                     135      643        693        34       575 
                                                                         
Specific provisions
  outstanding                 89      410        357        23       350 

* Net of suspended interest

The table provides in-country and cross-border outstandings and claims
under contracts in financial derivatives for the three Asian countries,
Indonesia, South Korea and Thailand, and Brazil that have negotiated
arrangements with the International Monetary Fund (IMF), together with
Malaysia, which implemented currency control restrictions in 1998.

In-country obligations represent local offices' on-balance-sheet
exposures to and acceptances given under facilities opened on behalf of
local residents.

Net cross-border obligations represent non-local offices' on-balance-
sheet exposures to and acceptances given under facilities opened on
behalf of customers based on the country of residence of the borrower or
guarantor of ultimate risk, irrespective of whether such exposures are
in local or foreign currency.

Cross-border risk is controlled centrally through a well-developed
system of country limits, which are frequently reviewed to avoid
concentrations of transfer, economic or political risks.

Brazil signed an agreement with the IMF in December 1998 designed to
sustain confidence in Brazil's exchange rate regime following economic
uncertainty subsequent to the default by Russia on its domestic debt.
After the float of the Brazilian currency in January 1999, Brazil agreed
to revised economic targets with the IMF, thereby allowing it to resume
drawing funds under the IMF programme. Subsequently, in March 1999,
Brazil reached agreement with a group of international banks (including
HSBC) whereby the banks will voluntarily maintain their trade-related
business and interbank lines with Brazil for a period of six months.

In September 1998, Malaysia introduced a limited form of exchange
controls to curb currency speculation against the Malaysian ringgit
following the regional economic crisis which began in 1997. This
involved, inter alia, fixing the exchange rate at 3.8 Malaysian ringgit
to the US dollar. As pressure on the ringgit subsided, interest rates
fell and the markets calmed and the Malaysian authorities have
subsequently been able to relax some of these controls. A comprehensive
programme to restructure and recapitalise the banking system has been
put in place through the establishment of two government agencies:
Pengurusan Danaharta Nasional Berhad, which has made progress in
absorbing non-performing loans from Malaysian banks; and Danamodal
Nasional Berhad, which works to recapitalise banks where required.

On 31 March 1998, a loan agreement was signed between a group of
international banks (including HSBC) and the Republic of Korea, as part
of the first stage of the programme to address South Korea's economic
problems. The loan agreement facilitated a voluntary exchange of short-
term credits owed by Korean banks for new loans with one, two and three
year maturities guaranteed by the Republic of Korea. Subsequent to the
completion of the loan exchange, foreign currency liquidity pressures in
South Korea eased considerably, and the sovereign rating of the country
was reinstated to investment grade. On 8 April 1999, repayment of the
one year tranche of these loans took place and all principal and
interest remains current.

Thailand has not entered into any specific arrangements with the foreign
banking community to restructure its foreign currency obligations, but
has, however, taken positive steps under its IMF programme to
recapitalise its financial system.

On 4 June 1998, an agreement was reached between the Steering Committee
of Banks for Indonesia (including HSBC) and the Indonesia debt
negotiation team with respect to the general terms of a comprehensive
programme to address Indonesia's external debt problems.  The programme
consists of three principal components: (i) the voluntary maintenance of
trade finance by foreign banks to the Indonesian banking system,
effected by the completion of individual agreements between Bank
Indonesia (the central bank) and the foreign banks during the second
half of 1998; (ii) an exchange offer through which foreign banks could
exchange specified existing exposures to Indonesian banks for loans
guaranteed by Bank Indonesia with maturities of one, two, three and four
years, which is evidenced by a number of separate loan agreements
completed during the second half of 1998; and (iii) 'INDRA', the
Government of Indonesia's voluntary programme for the provision of
foreign exchange availability to Indonesian corporate obligors on a case-
by-case basis.  On 8 April 1999, a second exchange offer was concluded
extending maturities in years 2000 and 2001, to years 2002 to 2005.

Asset disposition                                    
                      At 30JUN99      At 30JUN98        At 31DEC98
Figures in US$m                                                      
                                                                     
Total assets                                                         
                                 %               %                 % 
Europe               194,977  39.8  192,817   40.4   190,823    40.2 
Hong Kong            157,004  32.1  140,124   29.4   149,127    31.3 
Rest of Asia-Pacific  52,238  10.7   54,244   11.4    57,253    12.0 
North America         71,469  14.6   73,436   15.4    63,903    13.4 
Latin America         13,555   2.8   16,222    3.4    14,614     3.1 
                                                                     
Group total          489,243 100.0  476,843  100.0   475,720   100.0 
                                                                     
Loans and advances                                                   
  to customers       236,125  48.3  241,100   50.6   235,295    49.5 
                      
                                                                     
Loans and advances                                                   
  to banks            96,136  19.6   98,736   20.7    85,315    18.0 
                                                                     
Debt securities       75,066  15.4   59,181   12.4    69,185    14.5 
                                                                     
Treasury bills and                                                   
  other                                                              
  eligible bills      23,683   4.8   15,773    3.3    21,980     4.6 
                                                                     
Equity shares          4,420   0.9    4,353    0.9     4,221     0.9 
                                                                     
Mark-to-market of                                                    
  exchange rate                                                      
  and interest rate                                                  
  contracts           12,531   2.6   17,514    3.7    18,206     3.8 
                                                                     
Other                 41,282   8.4   40,186    8.4    41,518     8.7 
                     489,243 100.0  476,843  100.0   475,720   100.0 
                         
HK SAR Government                                                    
  certificates of                                                    
  indebtedness         7,277          7,524            7,408         
Total assets         496,520        484,367          483,128         
                                                                     
Loans and                                                            
  advances to                                                        
  customers include:                                                 
  - reverse repos      4,532          7,082            2,951         
  - settlement          
    accounts           9,153          6,315            4,959
                                                                     
Loans and advances                                                   
  to banks include:                                                  
  - reverse repos      9,338         16,828            7,411         
  - settlement                                                       
    accounts           4,336          3,535            2,207         
                                                                     
Total assets increased by US$13.4 billion since 31 December 1998 mostly
as a result of increases in interbank loans and debt securities, which
reflected the placement of increased customer deposits, and financial
market transactions. Underlying customer lending generally fell in Asia
as a result of the economic contraction although increased lending was
achieved in India, Taiwan, the Middle East and Australia. In Hong Kong,
growth was achieved in respect of loans under the Hong Kong SAR
Government Home Ownership Scheme. In the UK, while mortgage lending and
business banking were generally flat, there was reasonable growth in
consumer credit, but the impact of the strengthening of the US dollar
against sterling by 5 per cent more than offset the underlying growth
in sterling terms. The acquisition of Mid-Med Bank in Malta added
US$1.9 billion to customer advances. In North America, modest growth
was achieved in the commercial loan book and from an increased level of
financial market transactions.

Debt securities held in accrual books showed an unrecognised loss, net
of off-balance-sheet hedges, of US$29 million (31 December 1998: gain
of US$298 million). Equity shares included US$1,091 million (31
December 1998: US$1,140 million) held on investment account, on which
there was an unrecognised gain of US$648 million (31 December 1998:
US$589 million).

No formal valuation of the Group's properties was carried out as at 30
June 1999 in view of the more stable property market conditions. The
next formal valuation will be carried out at the end of 1999.

Capital resources                                                      
                                    At 30JUN99  At 30JUN98  At 31DEC98
                                                                      
Capital ratios (%)                           %           %           % 
Total capital ratio                       15.3        14.0        13.6 
- excluding the US$3.0 billion share                                   
  placing                                 14.3                         
                                                                       
Tier 1 capital ratio                      11.4         9.8         9.7 
- excluding the US$3.0 billion share                                   
  placing                                 10.4                         
                                                                       
Composition of capital                                                 
Figures in US$m                                                        
Tier 1:                                                                
  Shareholders' funds and minorities                                   
  less property revaluation reserves    33,594      29,043      29,352 
                                                                       
Tier 2:                                                                
  Property revaluation reserves          2,087       2,852       2,121 
  General provisions                     1,776       1,847       1,807 
  Perpetual subordinated debt            3,252       3,279       3,276 
  Term subordinated debt                 6,683       6,367       6,433 
                                                                       
Total qualifying tier 2 capital         13,798      14,345      13,637 
                                                                       
Unconsolidated investments              (1,517)     (1,218)     (1,266)
Investments in other banks                (738)       (535)       (503)
Other deductions                          (147)       (112)       (128)
Total capital                           44,990      41,523      41,092 
                                                                       
Total risk-weighted assets             294,016     297,598     301,950 

The above figures were computed in accordance with the EU Consolidated
Supervision Directive.

Capital generation has been strong in the first half of 1999 as a result
of increased retained earnings set against a reduced requirement for
capital as risk-weighted assets fell. The share placing on 10 May raised
US$3.0 billion of equity. After adjustment for the effects of this
placing, the Group's total capital ratio would have been 14.3 per cent
and its tier 1 ratio would have been 10.4 per cent. Subsequent to 30 June
1999, HSBC Holdings raised US$1 billion and EUR300 million in tier 2 
capital, also as part of the financing for the proposed Republic New York 
and Safra Republic acquisitions.

Tier 1 capital also increased as a result of retained earnings and shares
issued in lieu of dividends which led to increases of US$1,576 million
and US$450 million respectively.

Tier 2 capital increased slightly, due to debt issuance exceeding
redemptions and regulatory amortisation.

Risk-weighted assets have declined slightly reflecting a change in asset
mix towards lower risk exposures. Risk-weighted assets in the trading
book reduced as a result of using internal Value at Risk models and
improved netting benefits.

HSBC Holdings plc                                HSBC European Operations
                                    Financial Review by Geographic Segment
_________________________________________________________________________

HSBC European Operations

In the first half of 1999, Europe's contribution to Group pre-tax
profits was US$1,719 million, an increase of 2.9 per cent compared with
the first half of 1998. The proportion of the Group's pre-tax profits
contributed by its European operations decreased from 45.3 per cent to
42.3 per cent due mainly to the partial recovery in Asian profitability
and higher profits in Brazil.

United Kingdom

UK Banking's operating profit increased by 3.9 per cent in local
currency terms compared with the first half of 1998. Increased net
interest income was generated by growth in deposits, with higher spreads
on loans offset by reduced spreads on current and savings accounts.
Increased fee income was earned from wealth management products,
personal current accounts and overdrafts, cards and private banking. Of
particular note, income from life assurance, general insurance and
investment products grew by 18 per cent with encouraging growth in cross-
sales statistics across the personal customer base. Higher marketing
campaign spend and increased volume-driven communication costs, together
with the effect of increased headcount and pay awards, increased
operating costs. Progress continued in respect of  UK Banking's
cost:income ratio which, at 53.7 per cent, showed a small improvement
compared with the first half of 1998.

Credit quality continued to be satisfactory although the charge for bad
and doubtful debts rose to US$213 million reflecting 0.5 per cent of
customer lending on an annualised basis, partly reflecting a higher
proportion of unsecured personal lending. Over the past 4 years,
personal lending excluding residential mortgages has grown by 100 per
cent; 70 per cent of the provisions charge in UK Banking in the first
half of 1999 was in respect of personal lending. The charge for bad and
doubtful debts was some US$100 million higher compared with the first
half of 1998 due both to higher new specific provisions and lower
recoveries.

Following further guidance issued by the Financial Services Authority, a
further charge of US$47 million was made within provisions for
contingent liabilities and commitments for the amount of redress
potentially payable to customers who may have been disadvantaged when
transferring from or opting out of occupational pension schemes. A
charge of US$99 million was made in the first half of 1998.

Operating profit within the UK treasury operations improved
significantly compared with the first half of 1998. Higher net interest
income resulted from reduced short-term funding costs following cuts in
the UK base rate. Dealing income of US$160 million was over 40 per cent
higher than the first half of 1998, with improved interest rate
derivative and bond trading income following difficult trading
conditions last year.

Asset Finance's operating profit was US$118 million, a slight decrease
compared with the first half of 1998. The drop in profit reflected
restructuring costs following a strategic review of markets and
operations.

In Investment Banking, equities trading produced stronger trading
results; staff costs grew as a result of increased compensation costs
linked to profit performance.

Other European Countries

The Group's other European commercial banking operations continued to
improve their profitability with strong performances in Greece, Turkey
and the Offshore Islands. This reflected higher levels of net interest
income and fee income. The charge for bad and doubtful debts remained
low.

The acquisition of a controlling stake in Mid-Med Bank in Malta was
completed in early June 1999 and contributed US$4 million to pre-tax
profits.

In investment banking, Germany reported improved results with improved
net interest income, commissions and higher dealing profits. In
Switzerland, the private banking operations continued to make a
satisfactory contribution.

                                     Half-year    Half-year      Half-year 
                                            to           to             to
Figures in US$m                        30JUN99      30JUN98        31DEC98 
                                                                        
Net interest income                      2,080         1,970         2,037 
                                                                        
Dividend income                             38            38            41 
Net fees and commissions                 1,660         1,525         1,570 
Dealing profits                            371           220           122 
Other income                               412           399           454 
Other operating income                   2,481         2,182         2,187 
                                                                           
Operating income                         4,561         4,152         4,224 
                                                                           
                                                                           
Staff costs                             (1,613)       (1,459)       (1,451)
Premises and equipment                    (260)         (259)         (452)
Other                                     (520)         (474)         (589)
Depreciation                              (270)         (221)         (292)
Operating expenses                      (2,663)       (2,413)       (2,784)
                                                                           
Operating profit before provisions       1,898         1,739         1,440 
                                                                           
Provisions for bad and doubtful debts     (213)         (107)         (262)
                                                                           
Provisions for contingent liabilities                                      
  and commitments                          (47)         (105)            9 
                                                                           
Amounts written off                                                        
  fixed asset investments                   (4)           (6)          (10)
                                                                           
Operating profit                         1,634         1,521         1,177 
                                                                           
Income from associated undertakings         (8)            9            (9)
                                                                           
Gains on disposal of investments                                          
  and tangible fixed assets                 93           141            45 
                                                                          
Profit before tax*                       1,719         1,671         1,213 
                                                                          
Share of Group pre-tax profits            42.3%         45.3%         42.0%
                                                                          
Period end staff numbers (FTE basis)    50,859         49,319       49,798 
                                                                          
Cost:income ratio                         58.4%          58.1%        65.9%
                                                                          
* of which United Kingdom                1,449          1,482        1,060 

Customer loans and advances and provisions                           
                                             AT           AT          AT 
                                        30JUN99      30JUN98     31DEC98
Figures in US$m                                                          
                                                                            
Loans and advances to customers (gross)  97,051       94,907      93,564    
                                                                            
Residential mortgages                    20,472       20,456      20,716    
Other personal                           11,956       10,744      12,000    
Total personal                           32,428       31,200      32,716    
Commercial, industrial and                                                  
international
  trade                                  28,372       27,819      28,224    
Commercial real estate                    6,159        6,290       6,418    
Other property related                    2,288        2,094       2,110    
Government                                3,112        3,725       3,381    
Non-bank financial institutions           5,375        5,449       4,638    
Settlement accounts                       4,108        3,546         877    
Other commercial*                        15,209       14,784      15,200    
                                                                            
Specific provisions outstanding                                             
 against loans and advances               1,316        1,236       1,286    
                                                                            
Non-performing loans**                    2,445        2,260       2,326    
                                                                            
Specific provisions outstanding as a                                        
  percentage of non-performing loans**     53.8%        54.7%       55.3%  
                                                                            
Non-performing loans as a percentage                                        
  of gross loans and advances to                                            
  customers**                               2.5%         2.4%        2.5%  
                                                                            
Half-year bad and doubtful debt charge                                      
                                                                            
Loans and advances to customers                                          
- specific charge:                                                       
  new provisions                           321           247         376 
  releases and recoveries                 (127)         (166)       (140)
                                           194            81         236 
- general charge                            19            27          21 
Customer bad and doubtful debt charge      213           108         257 
                                                                         
Loans and advances to banks                                              
- net specific (releases)/charge             -            (1)          5 
                                                                         
Total bad and doubtful debt charge         213           107         262 
                                                                         
Customer bad debt charge as a                                            
  percentage of closing gross 
  loans and advances (annualised)          0.4%          0.2%        0.5%     
                                           

*   Includes advances in respect of Agriculture, Transport, Energy
    and Utilities.
**  Net of suspended interest.

HSBC Holdings plc                              HSBC Hong Kong Operations
                                                                        
_________________________________________________________________________


HSBC Hong Kong Operations

Our Hong Kong operations contributed US$1,391 million to the HSBC
Group's profit before tax in the first half of 1999, an increase of 8.2
per cent. This increase was achieved in a period of economic downturn,
high real interest rates and a highly competitive market with rising
non-performing advances. As a proportion of the HSBC Group's profit,
Hong Kong's contribution fell modestly from 34.9 per cent to 34.2 per
cent.

Net interest income in our banking operations in Hong Kong in the first
half of the year was higher than for the same period last year as the
positive impact of an increase in the level of average interest-earning
assets more than outweighed the fall in net interest margin. Margins
improved against the second half of 1998 and spreads were higher
against both the first and second halves of 1998. The widening of the
gap between the Hong Kong best lending rate and interbank rates, a
change in liability mix towards lower cost savings accounts and
increased spread on time deposits all had a favourable impact on
spreads. The growth in average interest-earning assets was primarily in
lower yielding short-term funds and placings with banks reflecting the
deployment of surplus funds as customer deposits increased while the
contraction in customer advances continued. This reduction in the
advances-to-deposits ratio negatively impacted spreads as did higher
levels of suspended interest. The contribution from net free funds fell
by 17 basis points in the bank in Hong Kong and 23 basis points in Hang
Seng Bank due principally to the effects of lower interest rates.

Hong Kong's other operating income was slightly higher than in the
first half of last year. Increased levels of fee income earned in
investment banking from structured finance businesses, and in
commercial banking from guarantee fees and newly launched retail
investment funds, more than offset the fall in fees from credit
facilities and trade finance. In Hong Kong our life and investment
business achieved an increase of more than 40 per cent in revenues,
compared with the first half of 1998. Dealing profits were higher as
increased profits on debt securities, interest rate derivatives and
equities trading more than outweighed the fall in foreign exchange
profits.

Careful management of costs resulted in almost no change in operating
expenses in the first half of 1999. The small increase in staff costs
related principally to increased retirement benefit costs. This
increase was largely offset by a decline in rent. The cost:income ratio
improved by 1.2 per cent to 34.9 per cent.

The net charge for bad and doubtful debts was US$319 million, some 3
per cent higher than the same period last year. Deterioration in
corporate asset quality and mainland China related exposures resulted
in an increase in the level of new specific provisions raised. This was
partially offset by higher releases of specific and general provisions.
The charge against non-performing residential mortgage lending
continued to be low. Although the bottom of the bad debt cycle may not
yet have been reached, there are signs that asset quality in Hong Kong
is stabilising and the rate at which non-performing loans are arising
is slowing.


                                   Half-year to Half-year to  Half-year to
Figures in US$m                         30JUN99      30JUN98       31DEC98 
                                                                         
Net interest income                       1,815       1,732          1,740 
                                                                           
Dividend income                              17          27             17 
Net fees and commissions                    430         415            421 
Dealing profits                             134         124            186 
Other income                                169         167            216 
                                            750         733            840 
                                                                           
Operating income                          2,565       2,465          2,580 
                                                                           
Staff costs                                (554)       (539)          (581)
Premises and equipment                     (119)       (129)          (127)
Other                                      (126)       (134)          (163)
Depreciation                                (95)        (89)           (89)
Operating expenses                         (894)       (891)          (960)
                                                                           
Operating profit before provisions        1,671       1,574          1,620 
                                                                           
Provisions for bad and doubtful debts      (319)       (310)          (437)
                                                                           
Provisions for contingent liabilities                                      
  and commitments                             2           1             (1)
                                                                           
Amounts written off fixed asset                                            
  investments                                (4)         2             (59)
                                                                           
Operating profit                          1,350       1,267          1,123 
                                                                           
Income from associated undertakings          11          12             11 
                                                                           
Gains on disposal of investments and                                       
  tangible fixed assets                      30           6              8 
                                                                           
Profit before tax                         1,391       1,285          1,142 
                                                                           
Share of Group pre-tax profits             34.2%       34.9%          39.6%
                                                                           
Period end staff numbers (FTE basis)     23,976      24,341         24,447 
                                                                           
Cost:income ratio                          34.9%       36.1%          37.2%
                                                                           
Customer loans and advances and provisions           
                  
                                     At 30JUN99   At 30JUN98   At 31DEC98     
                                           
Figures in US$m                      

Loans and advances to customers (gross)  66,700       70,890       68,484    
                                                                            
Residential mortgages                    24,339       25,185       25,051    
Hong Kong SAR Government Home                                               
  Ownership Scheme                        6,628        5,274        6,291    
Other personal                            4,080        4,575        4,257    
Total personal                           35,047       35,034       35,599    
Commercial, industrial and        
  international trade                     9,992       12,191       10,952
Commercial real estate                    8,773       10,512        9,420    
Other property related                    2,234        1,938        2,248    
Government                                  276          395          551    
Non-bank financial institutions           2,530        2,750        2,259    
Settlement accounts                         481          187           78    
Other commercial*                         7,367        7,883        7,377    
                                                                            
Specific provisions outstanding against                                     
  loans and advances                      1,257          683        1,059    
                                                                            
Non-performing loans**                    3,043        1,188        2,520    
                                                                            
Specific provisions outstanding as a                                        
  percentage of non-performing loans**     41.3%        57.5%        42.0%  
                                                                            
Non-performing loans as a percentage                                        
  of gross loans and advances to  
  customers**                               4.6%         1.7%         3.7%
                                                                            
Half-year bad and doubtful debt charge                                      
                                                                            
Loans and advances to customers                                            
- specific charge:                                                         
  new provisions                           397           337           499 
   releases and recoveries                 (56)          (15)          (56)
                                           341           322           443 
- net general (releases)                   (22)          (12)           (6)
Total bad and doubtful debt charge         319           310           437 
                                                                           
Bad debt charge as a percentage of                                        
closing gross loans and advances                                          
  (annualised)                              1.0%         0.9%          1.3%

*   Includes advances in respect of Agriculture, Transport,
    Energy and Utilities.

**  Net of suspended interest.



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