1/4: HSBC Holdings FY03 PT 2

HSBC Holdings PLC
01 March 2004

Additional Information (continued)

7. Capital resources

Figures in US$m                                At 31Dec03   At 31Dec02

Capital ratios (%)

Total capital ratio                                  12.0         13.3

Tier 1 capital ratio                                  8.9          9.0

Composition of capital

Figures in US$m

Tier 1:
 Shareholders' funds                               74,473       52,406
 Minority interests                                 3,711        3,306
 Innovative tier 1 securities                       8,094        3,647
 Less: property revaluation reserves               (1,615)      (1,954)
   : goodwill capitalised and intangible assets   (29,920)     (17,855)
   : own shares held^                                 120         (601)
Total qualifying tier 1 capital                    54,863       38,949

Tier 2:
 Property revaluation reserves                      1,615        1,954
 General provisions                                 2,868        2,348
 Perpetual subordinated debt                        3,608        3,542
 Term subordinated debt                            15,795       12,875
 Minority and other interests in tier 2 capital       523          775
Total qualifying tier 2 capital                    24,409       21,494

Unconsolidated investments                         (4,101)      (2,231)
Investments in other banks                           (911)        (638)
Other deductions                                     (218)        (144)
Total capital                                      74,042       57,430

Total risk-weighted assets                        618,662      430,551

^ The treatment of own shares held for regulatory capital purposes has not
changed consequent on the changes to shareholders' funds introduced by Urgent
Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38
'Accounting for ESOP trusts', details of which are set out in Note 1 on page 17.
The comparative figures have not therefore been restated. The addition in 2003
relates primarily to own shares held within long-term assurance policyholders'
funds. This reverses their recognition in the own shares held reserve, as
insurance companies are treated as unconsolidated investments in regulatory
capital calculations.

The above figures were computed in accordance with the EU Banking Consolidation
Directive.

8. Foreign exchange exposure

The Group's foreign exchange exposure comprises trading exposures and structural
foreign currency translation exposure. Foreign exchange trading exposures
comprise those which arise from foreign exchange dealing within Treasury and
currency exposures originated by commercial banking businesses in HSBC. The
latter are transferred to local treasury units where they are managed, together
with exposures which result from dealing activities, within limits approved by
the Group Management Board.

The Group's structural foreign currency translation exposures are represented by
the net asset value of the holding company's foreign currency equity and
subordinated debt investments in its subsidiaries, branches and associated
undertakings. Gains or losses on structural foreign currency exposures are taken
to reserves. The Group's structural foreign currency exposures are managed with
the primary objective of ensuring, where practical, that the Group's and
individual banking subsidiaries' tier 1 capital ratios are protected from the
effect of changes in exchange rates.

9. Contingent liabilities and commitments

The total contract amounts of contingent liabilities and commitments which, at
31 December 2003, were US$488,644 million (31 December 2002: US$276,884 million)
are credit-related instruments which include acceptances, letters of credit,
guarantees and commitments to extend credit. The contractual amounts represent
the amounts at risk should the contract be fully drawn upon and the client
default. Since a significant portion of guarantees and commitments are expected
to expire without being drawn upon, the total of the contract amounts is not
representative of future liquidity requirements.

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

                                               Year ended   Year ended
Figures in US$m                                   31Dec03      31Dec02

Operating profit                                   12,297        9,035
Change in prepayments and accrued income           (6,825)         355
Change in accruals and deferred income              6,015          190
Interest on finance leases and similar hire
  purchase contracts                                   38           36
Interest on subordinated loan capital                 958          862
Depreciation and amortisation                       2,847        2,044
Amortisation of discounts and premiums                338           (8)
Provisions for bad and doubtful debts               6,093        1,321
Loans written off net of recoveries                (6,846)      (1,931)
Provisions for liabilities and charges                759          879
Provisions utilised                                  (781)      (1,331)
Amounts written off fixed asset investments            66          324
Net cash inflow from trading activities            14,959       11,776

Change in items in the course of collection
  from other banks                                   (135)         124
Change in treasury bills and other eligible
  bills                                               650          715
Change in loans and advances to banks             (14,537)      16,550
Change in loans and advances to customers         (77,614)     (35,332)
Change in other securities                        (10,518)       2,543
Change in other assets                             (4,302)      (7,055)
Change in deposits by banks                        14,628       (3,505)
Change in customer accounts                        76,085       31,161
Change in items in the course of transmission
  to other banks                                     (251)         716
Change in debt securities in issue                 13,976        2,935
Change in other liabilities                        14,443       (1,580)
Elimination of exchange differences^               (4,709)      (2,622)

Net cash inflow from operating activities          22,675       16,426

^ 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. Bad and doubtful debts

Figures in US$             2003 Half-year ended            2002 Half-year ended
  millions                30Jun   31Dec     2003          30Jun   31Dec     2002

By category:

Bad and doubtful
  debt charge

- specific charge:
  new provisions          3,089   4,688    7,777          1,340   1,338    2,678
  releases and
  recoveries               (640)   (923)  (1,563)          (502)   (504)  (1,006)
                          2,449   3,765    6,214            838     834    1,672
- net general
  release                   (75)    (46)    (121)          (123)   (228)    (351)

Total bad and
  doubtful debt
  charge                  2,374   3,719    6,093            715     606    1,321

Customers                 2,373   3,723    6,096            715     606    1,321
Banks                         1      (4)      (3)             -       -        -

Total                     2,374   3,719    6,093            715     606    1,321

12. Analysis of fees and commissions receivable and payable

                             2003 Half-year             2002 Half-year
                                ended                        ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Account services            1,089    1,228    2,317        802     913    1,715
Credit facilities             465      501      966        366     386      752
Remittances                   138      150      288        127     141      268
Cards                       1,119    1,857    2,976        577     665    1,242
Imports/Exports               285      324      609        263     293      556
Underwriting                   99       76      175         96      77      173
Insurance                     455      506      961        379     396      775
Mortgage servicing
  rights                       36       39       75         38      39       77
Trust income                   72       73      145         62      63      125
Broking income                379      494      873        402     371      773
Global custody                151      187      338        146     150      296
Maintenance income on
  operating leases             84       87      171         78      82      160
Funds under management        523      573    1,096        536     490    1,026
Unit trusts                   206      152      358        164     120      284
Corporate finance              81      108      189         57      65      122
Other                         452      571    1,023        449     452      901
Total fees and
  commissions receivable    5,634    6,926   12,560      4,542   4,703    9,245
Less: fees payable           (984)  (1,182)  (2,166)      (685)   (736)  (1,421)

Net fees and commissions    4,650    5,744   10,394      3,857   3,967    7,824

13. Geographical distribution of results

HSBC European Operations

                               2003 Half-year            2002 Half-year
                                  ended                      ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Net interest income         3,508    4,032    7,540      3,056   3,287    6,343

Dividend income               106       44      150        118      93      211
Net fees and commissions    2,446    2,746    5,192      2,216   2,312    4,528
Dealing profits               531      429      960        245     263      508
Other income                  570      683    1,253        516     509    1,025
Other operating income      3,653    3,902    7,555      3,095   3,177    6,272

Operating income            7,161    7,934   15,095      6,151   6,464   12,615

Staff costs                (2,632)  (2,944)  (5,576)    (2,141) (2,284)  (4,425)
Premises and equipment       (506)    (552)  (1,058)      (435)   (531)    (966)
Other                        (950)  (1,118)  (2,068)      (812)   (951)  (1,763)
Depreciation and 
  amortisation
 (excluding goodwill)        (396)    (431)    (827)      (309)   (415)    (724)
Goodwill amortisation        (376)    (382)    (758)      (307)   (344)    (651)
Operating expenses         (4,860)  (5,427) (10,287)    (4,004) (4,525)  (8,529)

Operating profit before
  provisions                2,301    2,507    4,808      2,147   1,939    4,086

Customers:
- new specific provisions    (551)    (934)  (1,485)      (448)   (515)    (963)
- releases and recoveries     207      286      493        167     162      329
                             (344)    (648)    (992)      (281)   (353)    (634)
- net general release           1      117      118          1      64       65
Total bad and doubtful
  debt charge                (343)    (531)    (874)      (280)   (289)    (569)

Provisions for contingent
  liabilities and
  commitments                 (17)     (16)     (33)       (20)      5      (15)

Amounts written off fixed
  asset investments           (46)     (18)     (64)      (128)   (139)    (267)
Operating profit            1,895    1,942    3,837      1,719   1,516    3,235

Share of operating (loss)
  in joint ventures          (132)       5     (127)       (20)     (6)     (26)

Share of operating profits
  in associates                18       29       47          6      (3)       3

Investment and fixed asset
  disposal gains               88      124      212        162     126      288

Profit before tax           1,869    2,100    3,969      1,867   1,633    3,500

HSBC Hong Kong Operations

                               2003 Half-year            2002 Half-year
                                  ended                      ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Net interest income         1,991    1,910    3,901      2,065   2,068    4,133

Dividend income                15       16       31         10      15       25
Net fees and commissions      647      736    1,383        612     652    1,264
Dealing profits               186      135      321         59      74      133
Other income                  274      322      596        234     261      495
Other operating income      1,122    1,209    2,331        915   1,002    1,917

Operating income            3,113    3,119    6,232      2,980   3,070    6,050

Staff costs                  (611)    (665)  (1,276)      (596)   (653)  (1,249)
Premises and equipment       (109)    (131)    (240)      (107)   (126)    (233)
Other                        (214)    (288)    (502)      (207)   (252)    (459)
Depreciation and
  amortisation (excluding
  goodwill)                   (98)     (96)    (194)       (99)    (99)    (198)
Goodwill amortisation          (3)       -       (3)         -       -        -
Operating expenses         (1,035)  (1,180)  (2,215)    (1,009) (1,130)  (2,139)

Operating profit before
  provisions                2,078    1,939    4,017      1,971   1,940    3,911

Customers:
- new specific
  provisions                 (389)    (266)    (655)      (226)   (302)    (528)
- releases and
  recoveries                  107      117      224        104      81      185
                             (282)    (149)    (431)      (122)   (221)    (343)
- net general release/
 (charge)                     (21)      52       31          1      96       97
Total bad and doubtful
  debt charge                (303)     (97)    (400)      (121)   (125)    (246)

Provisions for contingent
  liabilities and
  commitments                  (3)      (3)      (6)         4     (18)     (14)

Amounts written off
  fixed asset    
  investments                   5       26       31         (7)     (3)     (10)
Operating profit            1,777    1,865    3,642      1,847   1,794    3,641

Share of operating profit
  in associates                 6       12       18          8       3       11

Investments and fixed
  asset disposal gains         57       11       68         45      13       58

Profit before tax           1,840    1,888    3,728      1,900   1,810    3,710

HSBC Rest of Asia-Pacific Operations

                               2003 Half-year            2002 Half-year
                                  ended                      ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Net interest income           840      900    1,740        784     823    1,607

Dividend income                 3        1        4          1       2        3
Net fees and commissions      363      442      805        358     366      724
Dealing profits               231      190      421        186     178      364
Other income                   56       64      120         33      50       83
Other operating income        653      697    1,350        578     596    1,174

Operating income            1,493    1,597    3,090      1,362   1,419    2,781

Staff costs                  (427)    (525)    (952)      (400)   (426)    (826)
Premises and equipment        (80)     (84)    (164)       (72)    (84)    (156)
Other                        (235)    (292)    (527)      (198)   (256)    (454)
Depreciation and
  amortisation (excluding 
  goodwill)                   (47)     (51)     (98)       (44)    (48)     (92)
Goodwill amortisation         (19)     (16)     (35)       (17)    (16)     (33)
Operating expenses           (808)    (968)  (1,776)      (731)   (830)  (1,561)

Operating profit before
  provisions                  685      629    1,314        631     589    1,220

Customers:
- new specific provisions    (181)    (231)    (412)      (187)   (213)    (400)
- releases and recoveries     151      192      343        146     174      320
                              (30)     (39)     (69)       (41)    (39)     (80)
- net general release/
  (charge)                      4      (20)     (16)        (7)     (2)      (9)
Total bad and doubtful
  debt (charge)/release       (26)     (59)     (85)       (48)    (41)     (89)

Provisions for contingent
  liabilities and
  commitments                  (4)       3       (1)        14       4       18

Amounts written off fixed 
  asset investments             -       (2)      (2)        (1)     (1)      (2)

Operating profit              655      571    1,226        596     551    1,147

Share of operating profit/
  (loss) in joint ventures      -        -        -         (1)      1        -

Share of operating profit
  in associates                65       84      149         55      58      113

Investments and fixed asset
  disposal gains/(losses)      14        2       16          3      (3)       -

Profit before tax             734      657    1,391        653     607    1,260

HSBC North American Operations

                               2003 Half-year            2002 Half-year
                                  ended                      ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Net interest income         4,630    7,147   11,777      1,292   1,440    2,732
income

Dividend income                22       12       34         12      12       24
Net fees and commissions    1,044    1,632    2,676        492     492      984
Dealing profits               238      102      340         75      86      161
Other income                  424      508      932        123     210      333
Other operating income      1,728    2,254    3,982        702     800    1,502

Operating income            6,358    9,401   15,759      1,994   2,240    4,234

Staff costs                (1,593)  (2,130)  (3,723)      (765)   (772)  (1,537)
Premises and equipment       (319)    (426)    (745)      (166)   (190)    (356)
Other                        (936)  (1,305)  (2,241)      (296)   (355)    (651)
Depreciation and
  amortisation (excluding
  goodwill)                  (106)    (132)    (238)       (64)    (67)    (131)
Goodwill amortisation        (231)    (412)    (643)       (67)    (79)    (146)
Operating expenses         (3,185)  (4,405)  (7,590)    (1,358) (1,463)  (2,821)

Operating profit before
  provisions                3,173    4,996    8,169        636     777    1,413

Customers:
- new specific provisions  (1,835)  (3,127)  (4,962)      (243)   (156)    (399)
- releases and recoveries     143      279      422         64      50      114
                           (1,692)  (2,848)  (4,540)      (179)   (106)    (285)
- net general (charge)/
  release                      22     (158)    (136)        (3)    (12)     (15)
Total bad and doubtful
  debt charge              (1,670)  (3,006)  (4,676)      (182)   (118)    (300)

Provisions for contingent
  liabilities and   
  commitments                   2        1        3         (1)      4        3
Amounts written off fixed
  asset investments            (4)      (5)      (9)        (1)     (8)      (9)
Operating profit            1,501    1,986    3,487        452     655    1,107
Share of operating (loss)
  in joint ventures             8        3       11         (2)      -       (2)

Share of operating profit
  in associates                 3        3        6          2       6        8

Investments and fixed assets
  disposal gains               90       19      109        105      20      125

Profit before tax           1,602    2,011    3,613        557     681    1,238

HSBC South American Operations

                               2003 Half-year            2002 Half-year
                                  ended                      ended
Figures in US$m             30Jun    31Dec     2003      30Jun   31Dec     2002

Net interest income           252      388      640        396     249      645

Dividend income                 1        2        3         15       -       15
Net fees and  commissions     150      188      338        179     145      324
Dealing profits                72       64      136         80      67      147
Other income                  107       94      201         88      22      110
Other operating income        330      348      678        362     234      596

Operating income              582      736    1,318        758     483    1,241

Staff costs                  (230)    (354)    (584)      (301)   (271)    (572)
Premises and equipment        (55)     (69)    (124)       (63)    (50)    (113)
Other                        (127)    (200)    (327)      (184)   (146)    (330)
Depreciation and
  amortisation (excluding 
  goodwill)                   (19)     (21)     (40)       (29)    (16)     (45)
Goodwill amortisation          (3)      (8)     (11)        (5)    (19)     (24)
Operating expenses           (434)    (652)  (1,086)      (582)   (502)  (1,084)

Operating profit/(loss)
  before provisions           148       84      232        176     (19)     157

Customers:
- new specific provisions    (133)    (130)    (263)      (236)   (152)    (388)
- releases and recoveries      32       49       81         21      37       58
                             (101)     (81)    (182)      (215)   (115)    (330)
Argentina general              61       61      122        114      82      196

- net general release/
  (charge)                      8       (6)       2         17       -       17
Total bad and doubtful
  debt charge                 (32)     (26)     (58)       (84)    (33)    (117)

Provisions for contingent
  liabilities                   -        2        2          -     (31)     (31)
Loss on foreign currency
  redenomination in
  Argentina                   (34)      25       (9)       (45)    (23)     (68)

Amounts written off
  fixed asset investments     (15)     (47)     (62)        (2)    (34)     (36)

Operating profit/(loss)        67       38      105         45    (140)     (95)

Share of operating profit
  in associates                 -        1        1          -       -        -

Investments and fixed assets
  disposal (losses)/gains       -        9        9         35       2       37

Profit/(loss) before tax       67       48      115         80    (138)     (58)

14. Profit and loss account impact from Household

Half-year to 30Jun03
                                  30Jun03     30Jun03        30Jun03   30Jun02
                                    Total   Household   Rest of HSBC
                                     US$m        US$m           US$m      US$m

Interest receivable                18,206       3,492         14,714    14,229
Interest payable                   (6,985)       (702)        (6,283)   (6,636)

Net interest income                11,221       2,790          8,431     7,593

Other operating income              7,286         612          6,674     5,510

Operating income                   18,507       3,402         15,105    13,103

Operating expenses excluding
  goodwill                         (9,490)     (1,214)        (8,276)   (7,146)

Goodwill amortisation                (632)       (115)          (517)     (396)

Operating profit before
  provisions                        8,385       2,073          6,312     5,561

Provisions for bad and doubtful
  debts                            (2,374)     (1,539)          (835)     (715)
Provisions for contingent
  liabilities and commitments         (22)          -            (22)       (3)
Loss from foreign currency
  redenomination in Argentina         (34)          -            (34)      (45)
Amounts written off fixed
  asset investments                   (60)          -            (60)     (139)

Operating profit                    5,895         534          5,361     4,659

Share of operating loss in joint
  ventures                           (124)          -           (124)      (23)
Share of operating profit in
  associates                           92           -             92        71
Gains/(losses) on disposal of:
- investments                         264           2            262       351
- tangible fixed assets               (15)          -            (15)       (1)

Profit on ordinary activities
  before tax                        6,112         536          5,576     5,057

Tax on profit on ordinary
  activities                       (1,554)       (133)        (1,421)   (1,315)

Profit on ordinary activities
  after tax                         4,558         403          4,155     3,742

Minority interests:
- equity                             (261)          -           (261)     (278)
- non-equity                         (191)          -           (191)     (184)
Profit attributable to
  shareholders                      4,106         403          3,703     3,280

Half-year to 31Dec03

                                  31Dec03     31Dec03        31Dec03   31Dec02
                                    Total   Household   Rest of HSBC
                                     US$m        US$m           US$m      US$m

Interest receivable                21,762       6,894         14,868    14,366
Interest payable                   (7,385)     (1,379)        (6,006)   (6,499)

Net interest income                14,377       5,515          8,862     7,867

Other operating income              8,188       1,266          6,922     5,625

Operating income                   22,565       6,781         15,784    13,492

Operating expenses excluding
  goodwill                        (11,592)     (2,192)        (9,400)   (7,808)

Goodwill amortisation                (818)       (266)          (552)     (458)

Operating profit before
  provisions                       10,155       4,323          5,832     5,226

Provisions for bad and doubtful
  debts                            (3,719)     (3,036)          (683)     (606)
Provisions for contingent
  liabilities and commitments         (13)          -            (13)      (36)
Loss from foreign currency
  redenomination in Argentina          25           -             25       (23)
Amounts written off fixed
  asset investments                   (46)          -            (46)     (185)

Operating profit                    6,402       1,287          5,115     4,376

Share of operating loss in joint
  ventures                              8           -              8        (5)
Share of operating profit in
  associates                          129           -            129        64
Gains/(losses) on disposal of:
- investments                         187           4            183       181
- tangible fixed assets               (22)          -            (22)      (23)

Profit on ordinary activities
  before tax                        6,704       1,291          5,413     4,593

Tax on profit on ordinary
  activities                       (1,566)       (330)        (1,236)   (1,219)

Profit on ordinary activities
  after tax                         5,138         961          4,177     3,374

Minority interests:
- equity                             (226)          -           (226)     (227)
- non-equity                         (244)          -           (244)     (188)

Profit attributable to
  shareholders                      4,668         961          3,707     2,959

15. Registers of shareholders

The Overseas Branch Register of shareholders in Hong Kong will be closed for one
day, on Friday 19 March 2004. Any person who has acquired shares registered on
the Hong Kong Branch Register but who has not lodged the share transfer with the
Hong Kong Branch Registrar should do so before 4.00 pm on Thursday 18 March 2004
in order to receive the third interim dividend for 2003.

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 19 March 2004 in order to
receive the dividend.

Any person who has acquired shares registered on the Overseas Branch Register of
shareholders in Bermuda but who has not lodged the share transfer with the
Bermuda Branch Registrar should do so before 4.00 pm on Friday 19 March 2004 in
order to receive the dividend.

Transfers between the Principal Register or the Bermuda Branch Register and the
Hong Kong Branch Register may not be made while the Hong Kong Branch Register is
closed.

Transfers of American Depositary Shares should be lodged with the depositary by
12 noon on Friday 19 March 2004 in order to receive the dividend.

16. 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:

Period end                                  31Dec03            31Dec02

Closing : HK$/US$                             7.763              7.798
          £/US$                               0.560              0.620

Average : HK$/US$                             7.787              7.799
          £/US$                               0.612              0.666

17. Litigation

HSBC, through a number of its subsidiary undertakings, is named in and is
defending legal actions in various jurisdictions arising from its normal
business. None of these proceedings is regarded as material litigation.

18. Dealings in HSBC Holdings shares

On 8 May 2003 HSBC Life (International) Limited sold 20,902 HSBC Holdings
ordinary shares of US$0.50 each on the London Stock Exchange at 708.26 pence per
share.

Save for this and dealings by HSBC Bank plc and HSBC CCF Financial Products
(France) SNC, which are members of a European Economic Area exchange, neither
the Company nor any subsidiary undertaking has bought, sold or redeemed any
securities of the Company during the year ended 31 December 2003.

19. Statutory accounts

The information 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 2003 will be 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; the report was unqualified
and did not contain a statement under Section 237(2) or (3) of the Act.

20. 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. Certain statements, such as those
that include the words 'potential', 'estimated', and similar expressions or
variations on such expressions may be considered 'forward-looking statements'.

21. Corporate governance

HSBC is committed to high standards of corporate governance. Throughout 2003,
HSBC Holdings has complied with the best practice provisions of the Combined
Code on corporate governance appended to the Listing Rules of the Financial
Services Authority and with the provisions of Appendix 14 to the Rules Governing
the Listing of Securities on The Stock Exchange of Hong Kong.

22. Remuneration

Within the authority delegated by the Board of Directors, the Remuneration
Committee is responsible for determining the remuneration policy of HSBC
including the terms of bonus plans, share option plans and other long-term
incentive plans, and for agreeing the individual remuneration packages of
executive Directors and other senior Group employees. No Directors are involved
in deciding their own remuneration.

The Remuneration Committee applies the following key principles:

- to ensure that remuneration is competitive in relation to comparative
  organisations in each of the countries or regions in which HSBC operates;

- to offer fair and realistic salaries with an important element of variable pay
  based on relative performance;

- to have as many top-performers as possible at all levels within HSBC
  participating in some form of long-term share plan; and

- since 1996, to follow a policy of moving progressively from defined benefit to
  defined contribution Group pension schemes for new employees only.

Employees' salaries are reviewed annually in the context of individual and
business performance, market practice, internal relativities and competitive
market pressures. Allowances and benefits are largely determined by local market
practice. Employees participate in various bonus arrangements. The level of
performance-related variable pay depends upon the performance of HSBC Holdings,
constituent businesses and the individual concerned. Bonus ranges are reviewed
in the context of prevailing market practice and overall remuneration.

In order to align the interests of employees with those of shareholders,
employees generally are eligible to be considered for discretionary awards of
share options under the HSBC Holdings Group Share Option Plan. For the majority
of employees, the vesting of share awards under the HSBC Holdings Group Share
Option Plan is subject to the attainment of total shareholder return targets.
The impact on existing equity of granting share options which are to be
satisfied by the issue of new shares is shown in diluted earnings per share on
the face of the consolidated profit and loss account, with further details being
disclosed in Note 11 of the 'Notes on the Financial Statements' in the Annual
Report and Accounts. The effect on basic earnings per share of exercising all
outstanding share options would be to dilute it by 0.40 per cent.

There were 222,719 full-time equivalent employees at 31 December 2003 (2002:
184,405). During 2003, over 56,000 employees in more than 50 countries and
territories applied for savings-related share options.

23. Annual Review and Annual Report and Accounts

The Annual Review 2003 and/or Annual Report and Accounts 2003 will be mailed to
shareholders on or about 30 March 2004. Copies may be obtained from Group
Corporate Affairs, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United
Kingdom; Group Public Affairs, The Hongkong and Shanghai Banking Corporation
Limited, 1 Queen's Road Central, Hong Kong; Group Public Affairs, HSBC Bank USA,
452 Fifth Avenue, New York, NY 10018, USA; CCF, Direction de la Communication,
109 avenue des Champs-Elysees, 75419 Paris Cedex 08, France; or from the HSBC
Group website - www.hsbc.com.

Chinese translations of the Annual Review and Annual Report and Accounts may be
obtained on request from Computershare Hong Kong Investor Services Limited,
Rooms 1901-1905, Hopewell Centre, 183 Queen's Road East, Hong Kong.

A French translation of the Annual Review may be obtained on request from CCF,
Direction de la Communication, 109 avenue des Champs-Elysees, 75419 Paris Cedex
08, France.

The Annual Report and Accounts and Annual Review will be available on the Stock
Exchange of Hong Kong's website - www.hkex.com.hk.

Custodians or nominees that wish to distribute copies of the Annual Review and/
or Annual Report and Accounts to their clients may request copies for collection
by writing to Group Corporate Affairs at the address given above. Requests must
be received no later than 8 March 2004.

24. Annual General Meeting

The Annual General Meeting of the Company will be held at the Barbican Hall,
Barbican Centre, London EC2 on 28 May 2004 at 11 a.m.
Notice of the meeting will be mailed to shareholders on or about 30 March 2004.

25. Interim results for 2004

The interim results for the six months to 30 June 2004 will be announced on
Monday 2 August 2004.

26. Proposed dividends for 2004

As announced in 2003 the Board has adopted a policy of paying quarterly
dividends. Under this policy it is intended to have a pattern of three equal
interim dividends with a variable fourth interim dividend. It is envisaged that
the first interim dividend in respect of 2004 will be US$0.13 per share. The
proposed timetables for the dividends in respect of 2004 are:

First interim dividend for 2004

Announcement                                                        4 May 2004

Shares quoted ex-dividend in London, Hong Kong and Bermuda;
American Depositary Shares quoted ex-dividend in New York           19 May 2004

Record date and closure of Hong Kong
Overseas Branch Register of shareholders for one day                21 May 2004

Shares quoted ex-dividend in Paris                                  24 May 2004

Payment date                                                        7 July 2004

Second interim dividend for 2004

Announcement                                                        2 August 2004

Shares quoted ex-dividend in London, Hong Kong and Bermuda;
American Depositary Shares quoted ex-dividend in New York           18 August 2004

Record date and closure of Hong Kong
Overseas Branch Register of shareholders for one day                20 August 2004

Shares quoted ex-dividend in Paris                                  23 August 2004

Payment date                                                        6 October 2004

Third interim dividend for 2004

Announcement                                                        8 November 2004

American Depositary Shares quoted ex-dividend in New York           23 November 2004

Shares quoted ex-dividend in London, Hong Kong and Bermuda          24 November 2004

Record date and closure of Hong Kong
Overseas Branch Register of shareholders for one day                26 November 2004

Shares quoted ex-dividend in Paris                                  29 November 2004

Payment date                                                        20 January 2005

Fourth interim dividend for 2004

Announcement                                                        28 February 2005

Shares quoted ex-dividend in London, Hong Kong and Bermuda;
American Depositary Shares quoted ex-dividend in New York           16 March 2005

Record date and closure of Hong Kong
Overseas Branch Register of shareholders for one day                18 March 2005

Shares quoted ex-dividend in Paris                                  21 March 2005

Payment date                                                        4 May 2005

27. News release

Copies of this news release may be obtained from Group Corporate Affairs, HSBC
Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; The Hongkong and
Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong; HSBC
Bank USA, 452 Fifth Avenue, New York, NY 10018, USA; CCF, Direction de la
Communication, 109 avenue des Champs-Elysees, 75419 Paris Cedex 08, France. The
news release will also be available on the HSBC Group website - www.hsbc.com.



                      This information is provided by RNS
            The company news service from the London Stock Exchange