Chairman's Statement

HSBC Hldgs PLC
26 May 2000


           HSBC HOLDINGS PLC ANNUAL GENERAL MEETING

The following is a statement given by Sir John Bond, Group
Chairman, HSBC Holdings plc, at the Annual General Meeting
held at the Barbican Hall, London, on Friday 26 May 2000.

I would like to thank you for coming here today. This meeting
is an opportunity for our owners to review HSBC's performance
during 1999. We are committed to delivering a first-class
investment for you, our shareholders. And I should mention
that beyond our 175,000 direct shareholders, there are perhaps
another 17 million people who have an interest in HSBC's
performance because they own shares indirectly through pension
funds.

In addition to shareholders, many people - customers, staff,
the communities in which we operate, and, increasingly,
special interest groups have an interest in the running of our
business. Recognising the concerns of these constituencies and
balancing our obligations to different groups is not a simple
task, although we undertake it willingly. It is only possible
to achieve this from a position of success. A successful
company creates returns for shareholders, gives confidence to
customers, ensures job security for staff and is able to
contribute to the community at large.

1999 was a year when we made good progress in implementing our
strategy of 'Managing for Value'. HSBC's Total Shareholder
Return was 172 per cent, compared to 120 per cent for the TSR
benchmark of our competitors.

HSBC's results for 1999 were significantly better than those
achieved in 1998. Profit attributable to shareholders
increased by 25 per cent to US$5,408 million and the
total dividend for the year increased by 10.3 per cent to 34
US cents per share.

These results reflect the improvement in Asia's economies and
the resilience of our customer base. One of the most positive
features of our performance was that, in a year in which our
customer lending declined, our operating profit before
provisions, at US$9.7 billion, was 7 per cent higher
than in 1998. In line with our 'Managing for Value'
strategy, this was achieved both by expanding the
relationships we have with existing customers and by winning
new customers through organic growth and acquisition. The
results are also testament to the excellence of more than
145,000 colleagues around the world.

In the last year, I have been able to visit staff in 16
countries and everywhere I go, I am impressed by their
professionalism and dedication.

Any organisation is only as good as its people and at HSBC we
have a team second to none, here in the UK and around the
world.

We seek to align the interests of shareholders and staff by
driving incentives deep into the company so that those who
serve our customers face-to-face can be rewarded for superior
performance. Over 58,000 of my colleagues now participate in one 
of the Group's employee share plans. Many staff set aside savings
every month to invest in HSBC. In addition, over 28,000
members of staff received share options in April.

Last year - and quite understandably - a shareholder raised
the question of potential dilution by the issue of these
shares. You may be reassured to know that the dilutive effect
of exercising all outstanding share options would be only 0.98
per cent of basic earnings per share.

HSBC is also fortunate to have an excellent board which
carries out its task of representing our owners' interests by
being a constant source of ideas and constructive criticism
for the management team. One of today's resolutions proposes
an increase in directors' fees - the first since 1997 - to
reflect the increase in statutory and regulatory duties
imposed on directors.

HSBC is now well-established as a global brand.  The
transition - involving a great many changes around the world -
was achieved within budget and on schedule. Our experience is
that the brand has been very well received by our customers,
most importantly in markets where HSBC replaced a long-
standing brand. The HSBC name is becoming increasingly well
known and respected around the world.

Banks in the UK have been subjected to a great deal of
criticism in recent months. Some of this criticism is clearly
justified. But not all banks are the same. And while there
will always be things that we could do better, our customers
and our research tell us that HSBC is different.

1999 also saw us undertake significant internal change to
enable us to succeed in the e-age. And in 2000, we are going
to market.

We are developing hsbc.com as the brand name and portal for
our consumer services. Over the coming months we will
progressively offer new services to our customers around the
world. We do not see this simply as a pc or Internet strategy,
rather it is an integral part of our services; it is the
fabric of HSBC.

We have developed our strategy by using a cross-section of the
best and brightest in the Group, from e-business, information
technology and business areas, including many of our younger
executives.

We have spent a year-and-a-half working with IBM designing and
rolling out a system called Interactive Financial Services -
IFS - which allows us to connect our massive existing
capability to the full spectrum of our customers' technology:
the internet, interactive TV, mobile phones and Wireless
Application Protocol devices. IFS may have to support a large
percentage of the 10 billion transactions a year we currently
undertake. It also allows transactions undertaken on one
channel to show immediately on any other, giving customers the
freedom to access their finances as they wish.

By the end of this year, we will be offering our personal
customers Internet banking in the UK, the USA, the Hong Kong
SAR, Singapore, Australia, Malaysia, Turkey and Greece.

HSBC Bank International, based in Jersey, will also offer
Internet banking, giving online access to expatriate customers
in over 200 countries. And we will offer our customers online
retail broking services in the UK, the Hong Kong SAR and the
USA.

First Direct is launching as firstdirect.com and with 700,000
of its customers already online, the potential is very
exciting.

Also in the UK, our investment in British Interactive
Broadcasting is proving a great success. Nearly 3 million
households now have access to its 'Open....' service and
80,000 customers have registered for TV banking with HSBC.

We have entered into a number of partnerships with leading 
e-commerce companies to maximise the combination of our
distribution and their technology.

For example, in Hong Kong we have entered into a joint
venture, iBusinessCorporation.com, with Hang Seng Bank, Cheung
Kong (Holdings) and Hutchison Whampoa Limited to facilitate e-
commerce business on the Internet.

We have also made selective investments to make sure that we
stay close to the technology. We have a stake in Financial
Technology Ventures, a fund from the Bay area of San Francisco
which specialises in technology applications for the financial
services sector and that facilitate e-commerce.

Doing this requires significant resources, both financial and
in terms of intellectual capital. In 2000 technology will
account for US$2 billion of our expenditure, a
significant proportion of which will be allocated to 
e-initiatives. An additional US$500 million will be
invested in capital expenditure on information technology.

In a busy start to the year, work is in hand on the
integration of Republic and Safra, acquired at the end of
1999. With the addition of this highly talented team of
people, HSBC is on course to build a world class international
private banking operation and strengthen its major commercial
banking operation in the US. Our results in the US in the
first quarter reflect our progress. Net income is up 31 per
cent.

Customer retention is strong and we are on target to achieve
cost savings of US$300 million per annum as we
announced originally.

We also announced a joint venture with Merrill Lynch to create
the first global online banking and investment services
company. This fusion of banking and investment products and
services will benefit customers who wish to take control of
their own finances.

HSBC and Merrill Lynch together will provide up to US$1 billion
in start-up capital over a five-year period. The new company will 
be co-branded 'Merrill Lynch HSBC'. It will be launched later this 
year in the UK, followed by Australia, Canada, Germany, the Hong 
Kong SAR and Japan, with other parts of the world to follow.

By combining resources with Merrill Lynch, we are able to
serve customers in more markets, more quickly and more
effectively than either company could on its own. The new
company will have a transforming effect on the rate at which
HSBC's e-business strategy can be implemented. It is a major
step forward for our wealth management strategy. At a stroke,
the new company makes HSBC and Merrill Lynch global players in
e-commerce.

On 1 April 2000, HSBC announced that it was making a
recommended offer to acquire Credit Commercial de France, CCF,
for a total consideration of US$10.5 billion. This
acquisition represents a unique opportunity to acquire a well-
managed, fast growing French bank on an agreed basis and to
establish a significant base in the Euro-zone. CCF will be one
of the five largest businesses within the HSBC Group, together
with the UK, the Hong Kong SAR and mainland China, Brazil and
the United States. There is an excellent strategic fit in
wealth management, corporate and institutional banking, and
asset management. The acquisition remains subject to
regulatory approvals and the level of acceptances from CCF's
shareholders. We hope to complete the acquisition in July.

Earlier this month we reached an agreement with Chase
Manhattan Bank to acquire their 11 branches in Panama.

And on 16 May 2000 we announced an agreement in principle
to acquire 75 per cent of Bangkok Metropolitan Bank. HSBC is
the oldest foreign bank in Thailand and completion of this
acquisition of what is the eighth largest bank there will give
us a sound base to develop retail and commercial businesses.

After this busy period, I cannot rule out further initiatives,
but we are not hungry for more acquisitions. Your management
team and Group IT resources have been at full stretch, but
they are equal to the task. The emphasis is now firmly on
integration and successful execution of our strategy. Our
results for the first quarter are encouraging.