Trinkaus & Burkhardt 1H2004

HSBC Holdings PLC
22 July 2004


                      HSBC TRINKAUS & BURKHARDT INCREASES
                    INTERIM OPERATING PROFITS BY 15 PER CENT

HSBC Trinkaus & Burkhardt, which is indirectly approximately 73.5 per cent owned
by HSBC Holdings plc, reported an increase in profit for the first six months of
2004. Net profit more than doubled from EUR 21.1 million for the same period in
2003 to EUR 47.1 million. As already announced in the bank's first quarter
results, this included a EUR 18.5 million exceptional gain on the sale of HSBC
Trinkaus & Burkhardt's indirect shareholding in HSBC Guyerzeller Bank.

The bank increased its operating profits after lending provisions by EUR 6.4
million, or 15.1 percent, to EUR 48.8 million compared to the same period in
2003. The main factors underlying this good trend included consistent execution
of the well-proven strategy in client business and continuing low lending
provision costs. Proprietary trading also considerably exceeded the prior year's
results.

The development of the first two quarters of 2004, compared to 2003, reveals
differing trends. While operating profits in the first quarter of 2004
benefited strongly from the above-average increase in trading profits, the
operating profits of the second quarter fell by EUR 4.4 million to EUR 20.0
million, that is by 18.0% compared to the very profitable second quarter of
2003. Net fees and commissions rose in the second quarter by a healthy 19.3 per
cent to EUR 8.9 million, while trading profits of EUR 12.2 million met
expectations but were overshadowed by growing uncertainty over the future
development of interest rates. Net profits in the second quarter rose to EUR 31
million, versus EUR 11.0 million for the same period in the prior year,
substantially caused by the exceptional gain on sale of the indirect investment
in HSBC Guyerzeller Bank.

Clear customer focus on three target groups: high net worth private clients,
corporate clients and institutional investors, enabled the bank steadily to
improve its competitive position. New clients of high quality continue to be won
and existing client relationships deepened. The success of this is visible above
all in net fees and commissions, whereas net interest income from client
business remained at the previous year's level as a result of lower interest
rates combined with slightly higher volume.

Net fees and commissions, the most important element of the bank's profits, rose
by 17.7 per cent, or EUR 16.5 million in the half-yearly results compared to the
same period of 2003, to EUR109.9 million. Client business was boosted
principally by much higher turnover in securities transactions, in which a
significant element was the sale of fixed income products. In the corporate
segment, international business expanded considerably due to close co-operation
with the HSBC Group worldwide, especially in the growth markets of Asia.

The main factors in the decline of overall net interest income by 15.3 per cent
to EUR 32.1 million were, firstly, the maturing of high interest bonds and
overall slightly declining volumes in financial investments. Secondly, the prior
year's figures still included earnings from the affiliated company, HSBC
Guyerzeller Bank, while these earnings are no longer reported with effect from 1
January 2004 due to the sale of this investment.

Trading profits improved in the first half year by EUR 5.9 million, or 21.5 per
cent, to EUR 33.3 million. Trading in equities and equity derivatives made the
largest contribution, while trading in foreign exchange, fixed interest
instruments and interest rate derivatives met expectations.

Lending provisions remained at a low level thanks to an unchanged conservative
policy in the assessment of credit risks and to the bank's effective risk
management.

Administrative expenses increased by 9.9%, or EUR11.4 million to EUR 126.9
million, a lower rate than the percentage increase of operating profits. The
cost:income ratio therefore improved compared to the first six months of 2003.
The main reasons for the increase in administrative expenses were higher
profit-related remuneration linked to the welcome growth in pre-tax profits, and
the high costs of information technology investment.

The Managing Partners maintain their objective of a double-digit increase in
operating profits for the 2004 financial year. This is supported by the further
success achieved in winning new clients in all client segments, stabilising and
extending the revenue base. Nevertheless, the level of net fees and commissions
continues to depend heavily on developments on the financial markets.




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