Interim Results - Part 5

HSBC Hldgs PLC
31 July 2000

Part 5

Additional Information

1. Accounting policies

The accounting policies adopted are consistent with those
described in the 1999 Annual Report and Accounts.

2. Dividend

The Directors have declared a first interim dividend for 2000
of US$0.15 per ordinary share, an increase of 13 per cent.
The dividend will be payable on 5 October 2000 to
shareholders on the Register at the close of business on 18
August 2000. The dividend will be payable in cash, in US
dollars, sterling or Hong Kong dollars, or a combination of
these currencies, at the exchange rates on 25 September 2000,
with a scrip dividend alternative. Particulars of these
arrangements will be mailed to shareholders on or about 25
August 2000, and elections will be required to be made by 18
September 2000.

The dividend payable in cash on shares held through SICOVAM,
the settlement and central depositary system in France, will
be converted into euros at the exchange rate on
25 September 2000 and paid on 5 October 2000 through Credit
Commercial de France, HSBC's paying agent.

The dividend payable to holders of American Depositary Shares
(ADSs), each of which represents five ordinary shares, will
be paid in cash in US dollars on 5 October 2000 or invested
in additional ADSs for participants in the dividend
reinvestment plan operated by HSBC Bank USA as depositary.

The Company's shares will be quoted ex-dividend in London and
in Hong Kong on 14 August 2000 and in Paris on 21 August 2000. 
The ADSs will be quoted ex-dividend in New York on 16 August 2000.

3. Earnings and dividend per share

                                                  Half-year to
                                         30 Jun     30 Jun      31 Dec
Figures in US$                             2000       1999^       1999

Basic earnings per share                   0.42       0.33        0.32

Cash earnings per share                    0.44       0.33        0.33

Diluted earnings per share                 0.41       0.33        0.32

Dividend per share                         0.15      0.133       0.207

^  Restated to reflect the share capital reorganisation implemented 
   on 2 July 1999.

Basic earnings per ordinary share was calculated by dividing
the earnings of US$3,525 million by the weighted average
number of ordinary shares outstanding of 8,455 million (first
half of 1999: earnings of US$2,694 million and 8,167 million
shares; second half of 1999: earnings of US$2,714 million and
8,426 million shares).

Diluted earnings per share was calculated by dividing the
basic earnings, which require no adjustment for the effects
of dilutive ordinary potential shares, by the weighted
average number of ordinary shares outstanding plus the
weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary
shares (being share options outstanding not yet exercised) of
8,551 million (first half of 1999: 8,237 million shares;
second half of 1999: 8,515 million shares).

The cash earnings per share was calculated by dividing the
basic earnings, including the add-back of amortised goodwill,
by the weighted average number of ordinary shares outstanding.


4. Economic profit

In 1999, HSBC enhanced its internal performance measures by
adopting economic profit, which takes into account the cost
of the capital invested in the Group by its shareholders.
HSBC prices that cost of capital internally and the
difference between that cost and post-tax profit is the
amount of economic profit generated. Economic profit is used
by management to decide where to allocate resources so that
they will be most productive. HSBC internally emphasises the
trend in economic profit within business units rather than
the absolute amounts in order to concentrate focus on
external factors rather than measurement bases. As a result
of this, HSBC has consistently used a benchmark cost of
capital of 12.5 per cent. Given the recent changes in
composition of the Group and evidence of the improving
economic conditions in Asia, we believe that HSBC's true cost
of capital is now below 12.5 per cent. The figure of 12.5 per
cent is used below for consistency and to help comparability;
it is possible that this figure will be revised later this
year.

Economic profit increased by US$715 million, or 94.5 per
cent, compared with the first half of 1999, and US$933
million, or 173.1 per cent, compared with the second half of
1999. Measurement of economic profit involves a number of
assumptions and, therefore, management believe that the trend
over time is more relevant than the absolute economic profit
reported for a single period.

                                       Half-year to
                        30 Jun          30 Jun          31 Dec
Figures in US$m           2000      %     1999      %     1999      %

Average invested
  capital               40,885          35,533          38,568

Annualised return
  on capital^            4,013   19.7    2,960   16.8    2,969   15.3

Benchmark cost of
  capital               (2,541) (12.5)  (2,203) (12.5)  (2,430) (12.5)

Economic profit          1,472    7.2      757    4.3      539    2.8

^   Return on capital represents profit after tax adjusted for non-equity
    minority interests, goodwill amortisation and other non-cash items.
    Percentage figures are annualised.


5. Subsequent events

On 28 July, HSBC completed its acquisition of CCF and now
holds 98.6 per cent of CCF's issued share capital, based on a
total number of CCF shares of 74,861,002 at 12 July 2000. A
total of 678,173,769 new HSBC US$0.50 ordinary shares have
been issued in respect of acceptances of the share offer.
These shares will be eligible to participate in the first
interim dividend for 2000. This will add US$102 million to
the dividend accrued as at 30 June 2000.

Under CCF's executive share option scheme, there remain
outstanding 3,727,525 options to subscribe for CCF shares.
Under agreements entered into with holders of such options,
HSBC will acquire the CCF shares as and when they are issued
upon exercise of the options, principally through exchange
into HSBC US$0.50 ordinary shares at the same exchange ratio
as under the share offer. The options are exercisable for up
to 10 years from the date on which they were granted. Up to a
further 42,672,825 HSBC shares may be made available to
holders of options in this way. HSBC is considering providing
HSBC shares for this purpose by transfer from an employee
benefit trust. In that event HSBC may propose to the trustee
that the trust should purchase in the market the HSBC shares
required.

On 15 July 2000, HSBC Bank plc agreed to sell its 20 per cent
investment in British Interactive Broadcasting (Holdings)
Limited for a consideration in shares, loan notes, or cash
valued at US$379 million plus, subject to certain performance
conditions, a further US$114 million. The sale is subject to
regulatory approval and the consideration is receivable in
instalments over a maximum period of three years from
completion.


6. Provisions against advances

Half-year to 30 June 2000
                                                               Suspended
Figures in US$m                Specific    General    Total     interest

At 1 January 2000                 5,716      2,304    8,020        1,073

Amounts written off                (722)         -     (722)        (148)

Recoveries of advances
  written off in previous
  years                              75          -       75            -

Charge/(credit) to profit
  and loss account                  500       (132)     368            -

Interest suspended during
  the year                            -          -        -          360

Suspended interest
  recovered                           -          -        -         (161)

Exchange and other
  movements                        (105)       (47)    (152)        (79)

At 30 June 2000                   5,464      2,125    7,589       1,045


Total outstanding provisions
                                     At 30 Jun   At 30 Jun   At 31 Dec
Figures in US$m                           2000        1999        1999

Loans and advances to customers:

- specific provisions                    5,442       5,200       5,692

- general provisions                     2,125       1,986       2,304
                                         7,567       7,186       7,996
Loans and advances to banks:

- specific provisions                       22          26          24

Total provisions                         7,589       7,212       8,020

Interest in suspense                     1,045         933       1,073

Provisions against loans and advances to customers

                                     At 30 Jun   At 30 Jun   At 31 Dec
                                          2000        1999        1999

Total provisions to gross lending^
                                             %           %           %
Specific provisions                       2.12        2.18        2.25

General provisions
- held against Asian risk                 0.07        0.12        0.11
- other                                   0.76        0.71        0.80

Total provisions                          2.95        3.01        3.16

Non-performing loans and advances

Figures in US$m

Banks                                       37          41          40

Customers                                9,854       9,957      10,525

Total non-performing loans
  and advances                           9,891       9,998      10,565

Total provisions cover as a
  percentage of non-performing 
  loans and advances                      76.7%       72.1%       75.9%

^^ Net of suspended interest and reverse repo transactions.


7. Gains on disposal of investments

                                                Half-year to
                                        30 Jun      30 Jun      31 Dec
Figures in US$m                           2000        1999        1999

Gains/(losses) on disposal of:
 - investment securities                   174         142         297
 - part of a business                        -          10           - 
 - other participating interests           (12)          -           - 
 - associates                                -           3           - 
 - subsidiaries                              -           -          (2)
                                           162         155         295

HSBC Private Equity recorded a US$28 million profit from
venture capital investment disposals (first half 1999: US$47
million; second half 1999: US$67 million).


8. Taxation
                                                Half-year to
                                        30 Jun     30 Jun        31 Dec
Figures in US$m                           2000       1999          1999

UK corporation tax charge                  421        431           165

Overseas taxation                          763        634           679

Deferred taxation                           88         34            95

Associated undertakings                     (9)         4            (4)

Total charge for taxation                1,263      1,103           935

Effective tax rate                        24.3%      27.1%         23.9%

The Company and its subsidiary undertakings in the UK
provided for UK corporation tax at 30 per cent, the rate for
the calendar year 2000 (1999: 30.25 per cent). Overseas tax
included Hong Kong profits tax of US$267 million (first half
1999: US$175 million; second half 1999: US$192 million)
provided at the rate of 16.0 per cent (1999: 16.0 per cent)
on the profits assessable in Hong Kong. Other overseas
taxation was provided for in the countries of operation at
the appropriate rates of taxation.

At 30 June 2000, there were potential future tax benefits
of approximately US$500 million (31 December 1999: US$520
million) in respect of trading losses, allowable
expenditure charged to the profit and loss account but not
yet allowed for tax, and capital losses which have not
been recognised because recoverability of the potential
benefits is not considered certain.

The effective tax rate was below the standard rate of UK
corporation tax of 30 per cent, mainly because of lower rates
of tax in major subsidiaries overseas, in particular in Hong
Kong, and the utilisation of previously unrecognised tax losses
in Asia.


9. Liabilities

                    At 30 Jun 2000    At 30 Jun 1999    At 31 Dec 1999

Figures in US$m
                                 %                 %                  %
Customer accounts   389,096   68.0    315,639   64.6     359,972   64.4

Deposits by banks    37,026    6.4     35,920    7.3      38,103    6.8

Debt securities
  in issue           20,680    3.6     29,084    5.9      33,780    6.0

Shareholders'
  funds              35,319    6.2     31,642    6.5      33,408    6.0

Other liabilities    90,249   15.8     76,958   15.7      93,971   16.8
                    572,370  100.0    489,243  100.0     559,234  100.0 

HK SAR currency
  notes in
  circulation         7,910             7,277              9,905

Total liabilities   580,280           496,520            569,139

Customer accounts include:
  - repos             8,196             4,719              6,470
  - settlement
    accounts          8,852            10,834              2,997

Deposits by banks include:
  - repos             7,079             4,246               6,669
  - settlement
    accounts          4,714             4,998               2,595


10. Reconciliation of operating profit to net cash flow from operating
activities

                                                 Half-year to          
                                        30 Jun      30 Jun      31 Dec
Figures in US$m                           2000        1999        1999

Operating profit                         5,020       3,851       3,558
Change in prepayments and accrued
  income                                  (157)        140         219
Change in accruals and deferred
  income                                  (231)       (169)        418
Interest on finance leases and
  similar hire purchase contracts           13          13          13
Interest on subordinated loan
  capital                                  595         380         446
Depreciation and amortisation              683         471         528
Amortisation of discounts and
  premiums                                (106)        (94)        (18)
Provisions for bad and doubtful
  debts                                    368       1,082         991
Loans written off net of recoveries       (647)       (422)       (599)
Provisions for liabilities and
  charges                                  385         393         372
Provisions utilised                       (260)       (298)       (180)
Amounts written off fixed asset
  investments                               14          12          16

Net cash inflow from trading
  activities                             5,677       5,359       5,764

Change in items in the course of
  collection from other banks           (2,300)       (856)      1,160
Change in treasury bills and other
  eligible bills                         1,833      (2,708)        701
Change in loans and advances to
  banks                                  2,766      (1,375)     (4,457)
Change in loans and advances to
  customers                             (7,598)        562         564
Change in other securities              (3,694)       (859)     12,152
Change in other assets                   2,421       6,172       1,497
Change in deposits by banks             (1,077)      1,432      (6,132)
Change in customer accounts             29,124       4,030       6,239
Change in items in the course of
  transmission to other banks            1,050         884        (325)
Change in debt securities in issue     (13,100)       (191)     (2,133)
Change in other liabilities^             1,734         (35)     (4,583)
Elimination of exchange
  differences^^                          1,060         353      (1,671)

Net cash inflow from operating
  activities                            17,896      12,768       8,776

^    The change in other liabilities excludes the creditor of US$9,733
     million at 31 December 1999 in respect of the acquisitions of the 
     former Republic and Safra Republic businesses, as this was a
     non-operating item. The settlement of this creditor was in January 2000
     and is recorded under 'Acquisitions and disposals' in the Consolidated
     Cash Flow Statement. 
^^   Adjustment to bring changes between opening and closing balance sheet
     amounts to average rates. This is not done on a line-by-line basis, as it
     cannot be determined without unreasonable expense.


11. Financial instruments, contingent liabilities and commitments

                                     At 30 Jun   At 30 Jun   At 31 Dec
Figures in US$m                           2000        1999        1999

Contract amounts

Contingent liabilities:
- acceptances and endorsements           4,379       3,663       4,482
- guarantees and assets pledged
  as collateral security                27,340      23,574      27,319
- other                                     13           7          39
                                        31,732      27,244      31,840
Commitments:
- documentary credits and short-
  term trade-related transactions        7,104       6,072       6,310
- forward asset purchases and
  forward forward deposits placed          498         481         487
- undrawn note issuing and revolving
  underwriting facilities                   90         360          82
- undrawn formal standby
  facilities, credit lines and
  other commitments to lend:
  - over 1 year                         33,288      27,586      33,246
  - 1 year and under                   130,656     106,364     128,613
                                       171,636     140,863     168,738

Exchange rate contracts                655,909     636,820     612,403

Interest rate contracts                905,964     913,272     951,479

Equities contracts                      35,897      30,147      33,459

The table above gives the nominal principal amounts of third
party off-balance-sheet transactions.

For contingent liabilities and commitments, the contract
amount represents the amount at risk should the contract be
fully drawn upon and the client default. The total of the
contract amounts is not representative of future liquidity
requirements.

For exchange rate, interest rate and equities contracts, the
notional or contractual amounts of these instruments indicate
the nominal value of transactions outstanding at the balance
sheet date; they do not represent amounts at risk.

The decline in the nominal value of exchange rate contracts
from June 1999 to December 1999 resulted from reduced
business volumes at the millennium year end, which outweighed
the increase due to the acquisition of the former Republic
and Safra Republic businesses. Volumes resumed normal levels
at June 2000. There was a small decline in the volume of
interest rate contracts since December 1999 arising in both
Asia and Europe.

The nominal value of interest rate contracts at June 2000 is
largely unchanged since June 1999, as the increase due to the
acquisition of the former Republic and Safra Republic
businesses is offset by decreases in Asia. The increase in
the nominal value of interest rate contracts between June
1999 and December 1999 is due to the acquisition of the
former Republic and Safra Republic businesses.

The increase in the nominal value of equity contracts between
June 1999 and June 2000 follows increased customer volumes in
2000.


12. Off-balance-sheet risk-weighted and replacement cost amounts

                                     At 30 Jun   At 30 Jun   At 31 Dec
Figures in US$m                           2000        1999        1999

Risk-weighted amounts

Contingent liabilities                  23,304      19,814      23,134
Commitments                             17,394      14,440      17,437

Replacement cost amounts

Exchange rate contracts                  5,720       5,893       6,764
Interest rate contracts                  3,290       4,743       4,171
Equities contracts                       2,088       2,177       2,685
Benefit of netting reflected
  in the above amounts                  (4,349)     (5,478)     (5,046)

Risk-weighted amounts are assessed in accordance with the
Financial Services Authority's guidelines which implement the
Basel agreement on capital adequacy and depend on the status
of the counterparty and the maturity characteristics.

Replacement cost of contracts represents the mark-to-market
assets on all third party contracts with a positive value,
ie, an asset to the HSBC Group. Replacement cost is,
therefore, a close approximation of the credit risk for these
contracts as at the balance sheet date. The actual credit
risk is measured internally and is the sum of the positive
mark-to-market value and an estimate for the future
fluctuation risk, using a future risk factor.

The fall in the replacement cost of interest rate contracts
reflects both lower volumes, particularly in the UK, and
movements in market prices. The fall in the replacement cost
of exchange rate contracts was a result of changes in product
mix and lower market volatility.


13. Market risk

Market risk is the risk that foreign exchange rates, interest
rates, or equities and commodity prices will move and result
in profits or losses to the HSBC Group. Market risk arises on
financial instruments which are valued at current market
prices (mark-to-market basis) and those valued at cost plus
any accrued interest (accruals basis).

The Group makes markets in exchange rate, interest rate, and
equities derivative instruments, as well as in debt, equities
and other securities. Trading risks arise either from
customer-related business or from position taking.

The Group manages market risk through risk limits approved by
the Group Executive Committee. Group Market Risk, an
independent unit within HSBC Holdings plc, develops risk
management policies and measurement techniques, and reviews
limit utilisation on a daily basis.

Risk limits are determined for each location and, within
location, for each portfolio. Limits are set by product and
risk type with market liquidity being a principal factor in
determining the level of limits set. Only those offices with
sufficient derivative product expertise and appropriate
control systems are authorised to trade derivative products.
Limits are set using a combination of risk measurement
techniques, including position limits, sensitivity limits, as
well as value at risk (VAR) limits at a portfolio level.
Similarly, options risks are controlled through full
revaluation limits in conjunction with limits on the
underlying variables that determine each option's value.

VAR is a technique which estimates the potential losses that
could occur on risk positions taken due to movements in
market rates and prices over a specified time horizon and to
a given level of confidence.

The VAR of the former Republic operations and, as at 31
December 1999, that of HRL, has been calculated using a
historical simulation approach, based on the previous two
years' data, using a 99 per cent confidence interval over a
10-day holding period; this method differs from that of the
rest of the HSBC Group and therefore this VAR is shown
separately.

For the rest of the Group, VAR is predominantly calculated on
a variance/covariance basis, uses historical movements in
market rates and prices, a 99 per cent confidence level, a 10-
day holding period and takes account of correlations between
different markets and rates and is calculated daily. The
movement in market prices is calculated by reference to
market data from the last two years. Aggregation of VAR from
different risk types is based upon the assumption of
independence between risk types.

During the first half of 2000, the method of computing VAR
for HRL was changed such that it is now incorporated with
that of the rest of the Group.

The table below gives the maximum, minimum and average VAR
for the Group (including HRL) as explained above, but
excludes the former Republic operations, as their VAR
reporting is on a different basis from that of the rest of
the Group.

VAR has inherent weaknesses. It is based on statistical
models which rely on underlying assumptions and, by its
nature, cannot cover every eventuality.

The Group recognises these limitations by augmenting the VAR
limits with other position and sensitivity limit structures,
as well as with stress testing, both on individual portfolios
and on a consolidated basis. The Group's stress testing
regime provides senior management with an assessment of the
impact of extreme events on the market risk exposures of the
Group.

Trading VAR for the Group, excluding the former Republic
operations, at 30 June was US$56.5 million (31 December 1999:
US$46.1 million). The trading book VAR for the former
Republic operations at 30 June was US$15.8 million (31
December 1999: US$14.5 million).

Trading VAR for the Group, excluding the former Republic
operations, was:

                                      Minimum   Maximum   Average
                                       during    during       for
                                          the       the       the
                              At 30     first     first      first    At 31
                                Jun      half      half       half      Dec
Figures in US$m                2000      2000      2000       2000     1999

Total trading activities       56.5      47.1      73.4       58.2     46.1

Foreign exchange trading
  positions                    25.5       8.9      25.5       16.0     12.8

Interest rate trading          37.6      33.7      66.4       49.7     39.4
  positions

Equities trading positions     25.0      19.5      25.0       21.5     16.2

Structural interest rate risk arises from the differing
repricing characteristics of commercial banking assets and
liabilities, including non-interest bearing liabilities such
as shareholders' funds and some current accounts. Each
operating entity assesses the structural interest rate risks
which arise in its business and either transfers such risks
to its local treasury unit for management or transfers the
risks to separate books managed by the local asset and
liability management committee ('ALCO'). Local ALCOs
regularly monitor all such interest rate risk positions,
subject to interest rate risk limits agreed with HSBC
Holdings plc. In the course of managing interest rate risk,
quantitative techniques and simulation models are used where
appropriate to identify and assess the potential net interest
income and market value effects of these interest rate
positions in different interest rate scenarios. The primary
objective of such interest rate risk management is to limit
potential adverse effects of interest rate movements on net
interest income.

HSBC has assessed its overall exposure to changes in interest
rates by calculating the approximate changes in net interest
income of HSBC's major businesses for changes in interest
rates. An immediate hypothetical 100 basis points parallel
rise or fall in all yield curves worldwide on 1 July 2000
would decrease planned net interest income for the twelve
months to 30 June 2001 by US$104 million or increase it by
US$51 million, respectively, assuming no management action in
response to these interest rate movements.

Rather than assuming that all interest rates move together,
HSBC's interest rate exposures can be grouped in blocs whose
interest rates are considered more likely to move together.
The sensitivity of net interest income for July 2000 to June
2001 can then be described as follows:

                       US                        Latin
                   dollar   Sterling   Asian   American   Euro    Total  Total
Figures in US$m      bloc       bloc    bloc       bloc   bloc   2000/1  2000^

Change in July 2000
  /June 2001 projected
  net interest Income
+ 100 basis points
  shift in yield 
  curves               46        (79)    (64)         9    (16)    (104) (116)
- 100 basis
  points shift in
  yield curves        (61)        41      64         (9)    16       51    82

^    2000 data is for the sensitivity of net interest income
     for the twelve months to 31 December 2000 to changes in
     interest rates at 1 January 2000.

The projections assume that rates of all maturities move by
the same amount and, therefore, do not reflect the potential
impact on net interest income of some rates changing while
others remain unchanged. The projections also make other
simplifying assumptions, such as no management action in
response to a change in interest rates.

The average daily revenue earned from market risk-related
treasury activities in the first half of 2000, including
accrual book net interest income and funding related to
dealing positions, was US$10.7 million (first half 1999:
US$9.5 million; second half 1999: US$6.9 million). The
standard deviation of these daily revenues was US$4.5
million. An analysis of the frequency distribution of daily
revenues shows that there were no days with negative revenues
during the first half of 2000. The most frequent result was a
daily revenue of between US$12 million and US$13 million,
with 17 occurrences. The highest daily revenue was US$23.4
million.


14. Segmental analysis

The allocation of earnings reflects the benefit of
shareholders' funds to the extent that these are actually
allocated to businesses in the segment by way of intra-Group
capital and funding structures. Common costs are included in
segments on the basis of the actual recharges made.

Geographical information has been classified by the location
of the principal operations of the subsidiary undertaking, or
in the case of The Hongkong and Shanghai Banking Corporation
Ltd, HSBC Bank plc, HSBC Bank Middle East and HSBC Bank USA
operations, by the location of the branch responsible for
reporting the results or for advancing the funds. Due to the
nature of the Group structure, the analysis of profits
includes intra-Group items between geographical regions. The 
Rest of Asia-Pacific' geographical segment includes the
Middle East, India and Australasia.


15. Attributable profit by principal subsidiary and line of business

                                                 Half-year to
                                        30 Jun      30 Jun      31 Dec
                                          2000        1999        1999
Figures in US$m

Hang Seng Bank                             667         550         521
  less: minority interests                (253)       (208)       (198)
                                           414         342         323

HSBC Investment Bank Asia Holdings          99          49         226
 
The Hongkong and Shanghai Banking
  Corporation Ltd and other
  subsidiaries                           1,165         707         661

The Hongkong and Shanghai Banking 
  Corporation Ltd and subsidiaries       1,678       1,098       1,210

HSBC Bank plc                            1,064       1,004         925
  less: preference dividend                (39)        (37)        (39)
                                         1,025         967         886


HSBC USA, Inc.                             313         235         231
HSBC Bank Middle East                       88          60          18
HSBC Bank Malaysia Berhad                   62        (140)         14
HSBC Bank Canada                            64          52          59
HSBC Latin American operations              89         169           9
HSBC Holdings sub-group                    (21)         27         129
Other commercial banking entities           55          73         114
UK GAAP adjustments                         (1)         22         (49)

Less: Investment banking profits^
  included above                          (210)        (67)       (234)

Commercial banking                       3,142       2,496       2,387

Investment banking^                        383         198         327

Group profit                             3,525       2,694       2,714

^    The figures for the half-years to 30 June 1999 and 31
     December 1999 have been restated to exclude income
     derived from unit trust related business, management
     responsibility for which was transferred from HSBC
     Investment Banking on
     1 January 2000.


16. Differences between UK GAAP and US GAAP

The consolidated financial statements of HSBC are prepared in
accordance with UK GAAP which differs in certain significant
respects from US GAAP. A summary of the significant
differences applicable to HSBC can be found in HSBC's
Registration Statement on Form 20-F for the year ended 31
December 1999.

The following tables summarise the significant adjustments to
consolidated net income and shareholders' equity which would
result from the application of US GAAP:

Net income

                                 Half-year to        Half-year to
Figures in US$m                  30 June 2000        30 June 1999

Attributable profit of HSBC
  (UK GAAP)                             3,525               2,694
Lease financing                           (25)                (32)
Debt swaps                                 99                   -
Shareholders' interest in
  long-term assurance fund                (51)                (55)
Pension costs                             (60)               (112)
Stock-based compensation                  (97)                (36)
Goodwill                                 (145)               (151)
Internal software costs                    65                  72
Revaluation of property                    30                  22
Purchase accounting adjustments           (50)                  -
Taxation
- US GAAP                                 (74)                 (8)
- on reconciling items                     28                  35
                                          (46)                 27

Minority interest in
  reconciling items                        (1)                  -


Estimated net income (US GAAP)          3,244               2,429

Per share amounts

Amounts on a US GAAP basis
                                          US$                 US$
Basic earnings per ordinary share        0.38                0.30
Diluted earnings per ordinary
  share                                  0.38                0.29
Cash earnings per ordinary share         0.42                0.32


Shareholders' equity 

Figures in US$m                At 30 Jun 2000      At 31 Dec 1999

Shareholders' funds (UK GAAP)          35,319              33,408
Lease financing                          (242)               (233)
Debt swaps                                 (6)               (108)
Shareholders' interest in
  long-term assurance fund               (579)               (563)
Pension costs                          (1,079)             (1,093)
Goodwill                                2,886               3,173
Internal software costs                   194                 137
Revaluation of property                (2,700)             (2,752)
Purchase accounting adjustments            80                 130
Fair value adjustment for
  securities available for sale           505                 736
Dividend payable                        1,280               1,754
Taxation
- US GAAP                                 630                 714
- on reconciling items                    425                 395
                                        1,055               1,109

Minority interest in
  reconciling items                       279                 232

Estimated shareholders' equity
  (US GAAP)                            36,992              35,930

Total assets

Total assets at 30 June 2000, incorporating adjustments
arising from the application of US GAAP, would be
US$591,860 million (31 December 1999: US$582,706 million).


17. Registers of shareholders

The Overseas Branch Register of shareholders in Hong Kong
will be closed from Wednesday 16 August to Friday 18 August
2000 (both dates inclusive). Any person who has acquired
shares registered on the Hong Kong Branch Register but who
has not lodged the share transfer with the Branch Registrar
should do so before 4.00 pm on Tuesday 15 August 2000 in
order to receive the dividend.

Any person who has acquired shares registered on the
Principal Register in the United Kingdom but who has not
lodged the share transfer with the Principal Registrar
should do so before 4.00 pm on Friday 18 August 2000 in
order to receive the dividend. Transfers between the
Principal Register and the Branch Register may not be made
while the Branch Register is closed.

Similarly, transfers of American Depositary Shares must be
lodged with the depositary, HSBC Bank USA, by noon on Friday
18 August 2000 in order to receive the dividend.


18. Foreign currency amounts

The sterling and Hong Kong dollar equivalent figures in the
consolidated profit and loss account and balance sheet are
for information only. These are translated at the average
rate for the period for the profit and loss account and the
closing rate for the balance sheet as follows:

                             30 Jun    30 Jun    31 Dec
Period-end                     2000      1999      1999

Closing : HK$/US$             7.795     7.759     7.773

        : £/US$               0.660     0.635     0.619

Average : HK$/US$             7.786     7.751     7.767^


        : £/US$               0.637     0.617     0.619^

^   Average for the second half of 1999.


19. Litigation

During 1999 Japanese and US regulatory agencies began
investigating Princeton Global Management Ltd (and related
entities), a customer of Republic's broker dealer subsidiary,
and Princeton's chairman, Martin Armstrong for his alleged
fraud in selling promissory notes to certain Japanese
entities. Certain of the Japanese entities which allegedly
hold such promissory notes have brought civil actions in the
United States against this broker dealer subsidiary and HSBC
USA, Inc. and HSBC Bank USA (as the successor to Republic New
York Corporation and Republic National Bank of New York,
respectively). The matter will be defended vigorously and is
described in greater detail in the 2000 Interim Report to
Shareholders.

The Group, through a number of its subsidiary undertakings,
is named in and is defending other legal actions in various
jurisdictions arising from its normal business. No material
adverse impact on the financial position of the Group is
expected to arise from these proceedings.


20. Substantial interests in share capital

No substantial interest, being 10 per cent or more, in the
equity share capital is recorded in the register
maintained under Section 16(1) of the Securities
(Disclosure of Interests) Ordinance.


21. Dealings in HSBC Holdings shares

Save for dealings by HSBC Investment Bank plc, trading as an
intermediary in the Company's shares in London, neither the
Company nor any subsidiary undertaking has bought or sold any
shares of the Company during the six months ended 30 June
2000.


22. Statutory accounts

The information in this in this news release does not 
constitute statutory accounts within the meaning of Section 
240 of the Companies Act 1985 (the Act). The statutory accounts
for the year ended 31 December 1999 have been delivered to the
Registrar of Companies in England and Wales in accordance with
Section 242 of the Act. The auditor has reported on those
accounts; its report was unqualified and did not contain a
statement under Section 237(2) or (3) of the Act.


23. Forward-looking statements

This news release contains certain forward-looking statements
with respect to the financial condition, results of operations
and business of the Group. These forward-looking statements
represent the Group's expectations or beliefs concerning future
events and involve known and unknown risks and uncertainty that
could cause actual results, performance or events to differ
materially from those expressed or implied in such statements.
For example, certain of the market risk disclosures, some of
which are only estimates and therefore could be materially
different from actual results, are dependent on key model
characteristics and assumptions and are subject to various
limitations. Certain statements, such as those that include
the words 'potential', 'value at risk', 'estimated', and similar
expressions or variations on such expressions may be considered
'forward-looking statements'.


24. Interim Report

Copies of  the Interim Report will be sent to registered
shareholders on or about 11 August 2000 and may be obtained
from Group Corporate Affairs, HSBC Holdings plc, 10 Lower
Thames Street, London EC3R 6AE, United Kingdom; or The Hongkong
and Shanghai Banking Corporation Limited, 1 Queen's Road Central,
Hong Kong; or HSBC Bank USA, 452 Fifth Avenue, New York, New York
10018, USA, or from the HSBC website -www.hsbc.com.

A Chinese translation of the report may be obtained on request
from Central Registration Hong Kong Limited, Rooms 1901-5,
Hopewell Centre, 183 Queen's Road East, Hong Kong.

A French translation of the report may be obtained by writing to
Credit Commercial de France, Direction de la Communication,103 
avenue des Champs-Elysees, 75419 Paris Cedex 08, France.

Custodians or nominees that wish to distribute copies of the
Interim Report to their clients may request copies for collection
by writing to Group Corporate Affairs at the addresses given above.


25. Review of Interim Financial Statements

The unaudited interim consolidated financial statements have been
reviewed by the Company's auditor, KPMG Audit Plc, and a report of
its review will be included in the Interim Report to shareholders.


26. News release

Copies of this news release may be obtained from Group Corporate
Affairs, HSBC Holdings plc, 10 Lower Thames Street, London EC3R 6AE,
United Kingdom; The Hongkong and Shanghai Banking Corporation Limited,
1 Queen's Road Central, Hong Kong; HSBC Bank USA, 452 Fifth Avenue,
New York, New York 10018, USA; or from the HSBC website - www.hsbc.com.