HSBC and M&S join in fin serv

HSBC Holdings PLC
12 July 2004


                     HSBC AND MARKS AND SPENCER JOIN FORCES
                             IN FINANCIAL SERVICES

HSBC Holdings plc (HSBC) and Marks and Spencer Group plc (Marks and Spencer) are
partnering in a business joint venture and have agreed to jointly manage and
grow Marks and Spencer Retail Financial Services Holdings Ltd (MSRF), which HSBC
will acquire 100 per cent of. Under the terms of the agreement, HSBC will pay an
up-front consideration of £275 million plus net asset value at completion (which
is currently estimated to be £488 million).

Marks and Spencer will also receive continuing payments for services to be
provided to MSRF based on product sales including a 50 per cent share of the
earnings of the business, after deducting certain costs that will be incurred by
HSBC. Under the terms of the agreement, HSBC will manage the existing and new
accounts generated during the period of the partnership, which has an initial
10-year term. The transaction should be completed by the end of 2004 and is
subject to regulatory and other approvals.

This transaction has been agreed following a competitive tendering process. HSBC
will operate the business under the Marks and Spencer brand. HSBC and Marks and
Spencer will partner in the business joint venture through contributing an equal
number of representatives to its Management Committee.

The agreement brings together two powerful brands with a common commitment to
outstanding customer care. It is consistent with HSBC's strategic objective to
grow its financial services and consumer finance business and makes it one of
the top three credit card issuers in the UK. The transaction is also expected to
achieve significant financial and operational benefits for MSRF through HSBC's
lower funding costs, leading operating capabilities and expertise in consumer
finance. Together, Marks and Spencer and HSBC will also increase the
effectiveness of customer marketing and loyalty programmes and extend product
choice for consumers.

Michael Geoghegan, Chief Executive of HSBC Bank plc, said: "Combining our
expertise in banking with Marks and Spencer's prestige and experience in
retailing will create an exciting new force in UK financial services.

"This is very much in line with our strategy to build our business. Marks and
Spencer enjoys a unique position in the minds of British consumers and together
we have the opportunity to nurture this for the mutual benefit of our business
and the 11 million customers visiting Marks and Spencer stores every week."

Stuart Rose, Chief Executive of Marks and Spencer, commented: "We have
successfully built a strong financial services business in less than 20 years.
It reflects the tremendous loyalty of our customers and with HSBC we will have
the opportunity to further develop our operations and aim to reach out to more
UK consumers.

"In HSBC we have a partner with unparalleled banking experience around the world
and a company we have trusted since first opening an account in 1894. It is the
top major bank for service and shares our commitment to foster quality relations
with customers as a basis for modern retailing. That marks our approach to
business and will remain the key to successfully building MSRF's business."

MSRF was established in 1985, has 2.7 million cardholders and had £2.5 billion
outstanding credit receivables, £439 million in deposits, and approximately £1
billion in funds under management as at 3 April 2004. It is one of the UK's top
10 credit card providers. The business provides its services from Marks and
Spencer's 375 stores and remote distribution channels. It offers a comprehensive
range of financial services to the company's retail customers including card
products, loans, savings, investments, and general insurance products.

Under the terms of the agreement, HSBC will acquire 100 per cent of Marks and
Spencer Retail Financial Services Holdings Ltd and its subsidiaries as follows:
Marks and Spencer Financial Services plc; Marks and Spencer Savings and
Investments Ltd; Marks and Spencer Unit Trust Management Ltd; and Marks and
Spencer Life Assurance Ltd.

Notes to editors:

The HSBC Group
HSBC Holdings plc is headquartered in the UK. The HSBC Group serves over 110
million customers worldwide from more than 9,500 offices in 79 countries and
territories in Europe, the Asia-Pacific region, the Americas, the Middle East
and Africa. With assets of US$1,034 billion at 31 December 2003, HSBC is one of
the world's largest banking and financial services organisations. HSBC is
marketed worldwide as 'the world's local bank'.

Marks and Spencer Group plc
Marks and Spencer is one of the UK's leading retailers of clothes, food, home
products and financial services with turnover of £7.3 billion. Some 11 million
people shop with them each week in the 375 stores. They employ just under 66,000
people at their UK stores and in their network of head offices. In addition they
have 155 stores managed under franchise in 28 territories mostly in Europe, the
Middle East, Asia and the Far East, stores in the Republic of Ireland, nine
wholly owned stores in Hong Kong and they own the US supermarket group, Kings
Super Markets.



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            The company news service from the London Stock Exchange