HSBC Bank PLC 2000 Results

HSBC Hldgs PLC
26 February 2001

HSBC Holdings plc
NEWS RELEASE 2 (1) of (1)

                        HSBC BANK plc
                  2000 RESULTS - HIGHLIGHTS
                             
                              
*    Pre-tax profit up 18.7 per cent to £2,046 million
     (£1,724 million in 1999).

*    Attributable profit up 12.0 per cent to £1,345 million
     (£1,201 million in 1999).

*    Operating profit before provisions up 10.2 per cent to
     £2,282 million (£2,070 million in 1999).

*    Return on average shareholders' funds (equity) of 18.7
     per cent (25.9 per cent for 1999).

*    Cost:income ratio (excluding the amortisation of
     goodwill) of 55.8 per cent, slightly up from 54.3 per
     cent in 1999.

*    Total capital ratio of 10.7 per cent; tier 1 capital
     ratio of 6.5 per cent.

Notes: The above highlights include the results for HSBC
       Republic and Credit Commercial de France.

     Effective 1 January 2000, a 50.8 per cent interest in
     HSBC Republic was acquired from HSBC Holdings plc.
     Following a restructuring, the bank's interest in the
     business was effectively increased to 97.4 per cent on
     15 December 2000.
     
     A 100 per cent interest in Credit Commercial de France
     was acquired from HSBC Holdings plc, on 31 October
     2000.

Financial Review For the Year Ended 31 December 2000

Figures in £m                             2000                  1999
                             HSBC Bank                                 
                             excluding     Acquisit-      HSBC     HSBC
                          acquisitions         ions^      Bank     Bank
                                                                        
Net interest income              2,488           228     2,716    2,391 
Other operating income           2,404           301     2,705    2,146 
Operating income                 4,892           529     5,421    4,537 
Operating expenses              (2,676)         (463)   (3,139)  (2,467)
Operating profit before                                                   
  provisions                     2,216            66     2,282    2,070 
Bad and doubtful debts            (252)            8      (244)    (281)
Provisions and amounts                                                  
  written off investments          (20)           (2)      (22)     (53)
Operating profit                 1,944            72     2,016    1,736 
Other                                                       30      (12)
Profit on ordinary                                                      
  activities before tax                                  2,046    1,724 
Tax on profit on ordinary                                              
  activities                                              (603)    (518)
Profit on ordinary                                                     
  activities after tax                                   1,443    1,206
Minority interests                                                     
-  equity                                                  (83)      (5)
-  non equity                                              (15)       -
Profit attributable to                                                 
  shareholders                                           1,345    1,201
                                                                       
Dividends                                               (1,200)  (1,147)
                                                                       
Basic and diluted earnings                                             
  per ordinary share (pence)                             162.6    144.8
Cash earnings per ordinary                                            
  share (pence)^^                                        177.1    145.2 
                                                                       
Total assets                                           185,203  106,468
                                                                     
Shareholders' funds (including non-equity                            
  interests)                                            14,684    4,868 
                                                                        
                                                             %        % 
Cost:income ratio (excluding the amortisation of                        
  goodwill)                                               55.8     54.3 
Net interest margin                                       2.42     2.72 
Return on average shareholders' funds (equity)            18.7     25.9 
Capital ratios:                                                      
- Total capital                                           10.7     11.3 
- Tier 1 capital                                           6.5      6.8 

^    The operating profit of acquisitions (HSBC Republic and
     Credit Commercial de France) are after charging £42
     million for the cost of funding the acquisitions and
     £111 million for the amortisation of goodwill.

^^   Cash earnings per share comprise basic earnings per share after
     adding back the impact of goodwill amortisation.


Figures in £m                                  2000           1999 
                                                                   
Results of principal business segments                             
                                                                   
Operating profit before amortisation of                            
  goodwill of:                                                     
- UK Banking                                  1,502          1,350 
- International Banking                         259            241 
- Treasury and Capital Markets                  188            148 
- HSBC Republic                                 147              - 
- Credit Commercial de France (CCF)              36              - 
                                              2,132          1,739 
Less goodwill amortisation^                    (116)            (3)
Operating profit                              2,016          1,736 
Share of operating loss in associated                              
  undertakings                                  (47)           (34)
Gains on disposal of investments and                               
  tangible fixed assets                          77             22 
Profit before tax                             2,046          1,724 
Tax on profit on ordinary activities           (603)          (518)
Minority interests                              (98)            (5)
Profit attributable to shareholders           1,345          1,201 

^ Amortisation of goodwill relates to CCF, HSBC Republic and
  International Banking.

In terms of the principal businesses:

UK Banking

Operating Profit was £1,502 million, 11 per cent higher than
1999.

HSBC Bank's strategy is to build long term relationships and
retain and attract customers through value for money products
and a high quality service.  The strategy is proving
successful, resulting in higher sales of wealth management
products.  Product pricing was reduced decreasing revenue by
over £50 million.  For example, annual fees on the bank's
credit card and gold Visa credit card were removed in 2000,
benefiting 2.2 million customers in total at a cost of £10
million.  Repricing of the mortgage book reduced interest
cost to customers by £10 million and removing loan to
valuation fees reduced revenue by over £3 million.  The bank
has no off-sale or superseded products paying lower rates of
interest than equivalent new ones.  From 1 January 2001, the
bank has not charged its customers for withdrawing cash on
debit cards from any UK ATM machine within the LINK network,
nor are other banks' customers charged for using HSBC
machines.

The bank remains committed to community banking in the UK
through its 1,663 branches.  Developments focus on creating
more time for branch staff to serve customers. Customers can
choose to do their banking through branches, the telephone,
the internet, interactive TV, mobile phones and ATMs.  The
bank aims to provide consistently high service across all
channels.

Telephone services were further enhanced and are becoming
increasingly popular, with a 23 per cent increase in calls to
49 million in 2000. Internet banking (www.hsbc.co.uk), which
was successfully launched in August, now has 340,000
registered customers.

The service allows customers to pay bills, make payments,
transfer money and view direct debits and standing orders,
and a number of innovations are planned for the future.  In
1999, the bank launched the UK's first nationally available
TV banking service and over 126,000 customers had registered
by the end of 2000.  The bank is currently piloting mobile
phone internet banking services and text messaging and plans
to launch these services in 2001.

In 2000, the bank made several significant enhancements to
its products for personal customers.  In July the bank took a
major initiative in the mortgage market, introducing a CAT
standard variable rate mortgage which guarantees a maximum
rate of interest of 1 per cent above base rate.  The bank was
the first mortgage lender to transfer existing customers to a
CAT standard product and this has increased mortgage
retention and sales volumes.  Almost 200,000 customers have
benefited from lower rates of interest.  Market share of net
new mortgage business significantly increased from 2.1 per
cent in the first half to 4.3 per cent in the second half.
In 2000, a number of best value awards were received from
What Mortgage magazine.  A new Basic Bank Account was
launched, reflecting HSBC's commitment to make banking
facilities widely available.

The bank continued to grow its wealth management business in
2000.  Life, pensions and investments business continued to
grow and HSBC is now one of the leading providers of term
assurance, critical illness and income protection policies.
In October the bank's range of unit trusts was successfully
converted to Open Ended Investment Companies (OEICs).
Pensions on stakeholder terms were introduced for new
customers and pensions for existing customers have been re-
priced to the same terms.  HSBC Premier, the HSBC Group's
first global premium banking service for personal customers,
was launched in the UK in March.

First Direct continued to grow in the year in an increasingly
competitive market.  It was again Britain's most recommended
bank and had the highest customer satisfaction.  First Direct
has remained profitable, generating a pre-tax profit of £39
million compared with £50 million in 1999, following
investment in the launch of its internet banking service
(www.firstdirect.com) which now has 270,000 registered
customers.  First Direct recently completed the launch of
'capital', offering telephone-based independent financial
advice and on-line and telephone access to investment and
protection products, selected using strict criteria including
performance, financial strength and customer service.  The
service also offers HSBC's CAT standard mortgage.

HSBC's commercial banking operations extend across the whole
of the UK business market and offer a full range of services
including current accounts, deposits, lending, invoice
finance and leasing, trade services, equity finance, cross-
border payments and cash management.  In 2000, several
improvements were made to products and services for
commercial customers.  Over 67,000 customers use the bank's
business telephone banking service.  An internet banking
service will be launched during 2001. HSBC continues to
experience strong demand for Hexagon, its global electronic
banking service for business customers with over 29,000
users, an increase of 29 per cent in the last 12 months.

HSBC has a strong tradition as a trade services bank, and
handled over 30 per cent of the import documentary credits
opened in the UK during 2000.  The bank has raised its
profile within the UK exporting community through the
sponsorship of the Government-backed 'Export Award for
Smaller Businesses'.

A service has been developed for business owners to manage
their finances both as individuals and as businesses, whilst
also focusing on the needs of their employees.  The bank has
been helping small businesses meet new stakeholder pension
requirements.  An internet-based proposition will be
introduced in April 2001.

The markets for the provision of banking services to small
and medium sized enterprises are currently being considered
by the Competition Commission, whose final report is due to
be presented to the Secretary of State for Trade and Industry
in June 2001.

The bank's largest corporate and institutional clients are
managed through specialist industry groups.  Activities are
co-ordinated across the HSBC Group, using its international
network to win cross border business. The promotion of the
HSBC brand, investment in European infrastructure and the
acquisitions of CCF and Republic have opened new
possibilities to supply core banking business, private
banking and wealth management services.  Significant progress
was made during the year to align further corporate and
institutional banking with investment banking to provide a
full range of products and services to major clients.  A new
product, On-Line Account Manager was launched in 2000,
providing market leading real-time internet reporting of
information to financial institutions and major corporate
clients.  More new products and internet-based offerings are
being developed to enhance the bank's service to customers.
In 2001, a new service will be launched which reduces the
inter-bank settlement risk associated with foreign exchange
business.

The bank's global custody division continues to grow
strongly.  As the leading UK custodian, it benefited from
significant growth in the markets for fixed income and equity
investments.  Assets under custody grew by 12 per cent to
£771 billion.

Net interest income was £2,127 million, 6 per cent higher
than 1999, generated by balance growth in personal and
commercial current accounts, personal savings and personal
and commercial lending.  The bank's repricing of variable
rate mortgages contributed to mortgage growth of £1.1
billion, with a decline in mortgage spread.  Spread was also
reduced on savings products, reflecting competitive pricing.
The effect on margin of the reduction in spread was partly
mitigated by greater benefit from free funds.

Other operating income was £1,981 million, 8 per cent higher
than 1999, primarily reflecting growth in wealth management
income and higher card, corporate banking and global safe
custody fees.

Wealth management income showed a significant increase on
1999, up 14 per cent, from £444 million to £504 million.
Within this, general insurance income increased by 7 per cent
and private client income by 18 per cent.  Life, pension and
investment income increased by £37 million or 16 per cent, of
which £10 million was the benefit of a reduction in the
discount rate, used to calculate the net present value of
future earnings inherent in policies in force, from 12.5 per
cent to 11.5 per cent.

Global safe custody fees increased by 36 per cent compared
with 1999, benefiting from high transaction volumes in 2000,
the acquisition of new customers and growth in assets under
custody.

Higher fee and other income was also generated by growth in
personal current account and overdraft fees, increased card
income and higher corporate banking fee income, mainly due to
the bank's involvement in an active mergers and acquisitions
market.

Operating expenses increased by £170 million or 8 per cent to
£2,317 million; the cost:income ratio remained at 56 per
cent.  Staff costs increased by £84 million or 7 per cent to
£1,277 million, reflecting growth in staff numbers to support
growth in the wealth management business and increased
business volumes, in addition to the effect of annual pay
increases and incentive costs.  Additional IT staff have
supported development projects integral to the continued
improvement in customer service, particularly in relation to
new delivery channels.  As a result of business growth, the
bank employed 3 per cent more staff on average during 2000.
Non-staff costs increased by £86 million or 9 per cent.  They
were incurred primarily to support business development,
including internet banking initiatives and continued branch
services improvement.  Increased business volumes also
contributed to higher expenditure, including IT processing
capacity.  Increased marketing costs included higher card
loyalty scheme costs.

The charge for bad and doubtful debts was £262 million, £48
million or 15 per cent lower than in 1999.  There was a
reduction of £85 million in new provisions, with lower
provisioning against corporate lending, mainly due to a small
number of large provisions in 1999.  Provisions were also
lower against card balances and in First Direct.  General
provisions increased by £28 million, reflecting balance sheet
growth.  The credit environment remains satisfactory, but a
small number of business and personal customers continue to
face difficulties from market pressures and unforeseen
changes in financial circumstances.

Provisions for contingent liabilities were £18 million lower
than 1999, mainly due to a lower charge for the amount of
redress potentially payable to customers who may have been
disadvantaged when transferring from or opting out of
occupational pensions schemes.

The bank's share of the results of associated undertakings
was a loss of £50 million compared with a loss of £44 million
in 1999.  The losses reflect the bank's 20 per cent
shareholding in British Interactive Broadcasting ('BiB') and
the associated investment in building its digital interactive
television services, Open...  In July, the bank agreed to
sell its investment in BiB to BSkyB, subject to regulatory
approval from the Office of Fair Trading, which is under
review currently.

International Banking

Operating profit before amortisation of goodwill was £259
million, an increase of £18 million or 7 per cent compared
with 1999.

International Banking carries out a varied range of financial
services principally across Europe.  The expansion of wealth
management was the key business initiative in 2000.

HSBC Bank International Limited, based in the Channel Islands
is the group's specialist provider of offshore financial
services, which produced an operating profit of £86 million.
It broadened its distribution channels through the launch of
an internet banking service (www.offshore.hsbc.com) providing
multi-currency banking and investment services. The service
now has online customers in over 150 countries.  A new
Capital Secured Growth Fund was launched, bringing total
funds under management to £4.0 billion.

In Greece, in support of the wealth management initiative,
nine personal financial centres were opened.  A multichannel
direct broking service comprising internet, interactive voice
response and personal service was also launched, and an
innovative mortgage product and debit card were introduced.
In January 2001, the bank announced the acquisition of the
branch-based operations of Barclays Bank.

New investment funds were launched in Greece, Spain and
Turkey, with Turkey strengthening its distribution by opening
five personal financial centres.  In Spain, funds under
management grew by 29 per cent and a pension fund service was
established.  A new private clients office was opened in
South Africa.

Turkey produced an operating profit of £53 million, in spite
of major volatility in the local markets.

HSBC Bank Malta reported an operating profit of £23 million
before amortisation of goodwill. During 2000, Malta focused
on becoming more customer driven and this involved the
provision of commercial business centres, the introduction of
a range of new products and services including personal loans
by telephone, an equity-linked capital guaranteed product,
new mortgage products and the refurbishment of the branch
network.

Net interest income was £264 million, 22 per cent higher than
1999 including a full year of income from Malta and increases
from Offshore, reflecting increased deposits, and from
Turkey, due to increased money market activity.

Other operating income was £168 million, 15 per cent higher
than 1999.  This includes gains due to the successful
launches of funds products globally from the Offshore Islands
and a full year of income from Malta.

Operating expenses before amortisation of goodwill were £186
million, 32 per cent higher than 1999, including a full year
of Malta expenses and higher staff costs in Offshore,
reflecting growth of staff numbers in support of business
expansion.

Treasury and Capital Markets

Operating profit was £188 million, £40 million or 27 per cent
higher than 1999.  In 2000 there was good all round performance
from foreign exchange, money market and fixed income activities,
primarily customer-driven business through the HSBC Group's
corporate client relationships.

The Treasury and Capital Markets business serves the
requirements of a diverse client base including corporations,
institutional investors, private investors and central banks.
Integrated activities utilise the balance sheet strength of
the bank to provide a high quality, tailored service in
foreign exchange, fixed income, money markets, exchange-
traded futures and options.  During the course of the year,
the bank has successfully integrated the London Treasury and
Capital Markets activities of the CCF Group and HSBC
Republic.

Net interest income was £97 million, 40 per cent lower than
1999.  There was a decrease in spread mainly due to a
reduction in earnings on money market business caused by a
flattening of the yield curve and higher costs of short-term
funding, together with the maturity of high yielding assets.

Other operating income was £255 million, 61 per cent higher
than 1999.  Foreign exchange income increased by 45 per cent
reflecting higher volumes, particularly in respect of
customer activities.  Much of this was realised from an
increase in business in the regional treasury centres, where
income increased by 40 per cent.

Fixed income results also improved notably in gilts and
derivatives activity, linking with an increase in debt
origination.  The currency options business also expanded
during 2000 with an increased presence in the Euro zone
following the absorption of former Republic Bank of New York
trading activities.

Operating expenses were £168 million, 5 per cent lower than
1999 due to improved operating efficiencies in the front and
the back offices and transfers of business with other HSBC
Group companies.

HSBC Republic

HSBC Republic provides private banking and trustee services
for high net worth individuals with banks located in
Switzerland, Monaco, Luxembourg and Guernsey.

The creation of HSBC Republic to bring together the former
Safra Republic Holdings businesses and HSBC's existing
international private banking operations, was a principal
focus of activity during 2000. The integration proceeded
successfully without loss of clients, assets or personnel in
the face of intense market competition for both clients and
employees.

As the business integration came to a natural close towards
the end of 2000, HSBC Republic instituted a global strategy
with strategic imperatives closely echoing the Group's client-
focused approach. HSBC Republic's client base requires a
highly differentiated service, provided through a combination
of geographical support and specialised bankers, with
expertise in areas such as sports and the media, diamonds and
jewellery, technology and entrepreneurial activity. In
support of front line private bankers substantial investment
is being made in the development of a global investment
advisory capability, benefiting from the recognised product
development expertise available within the HSBC Group.
Finally, HSBC Republic's investment in IT infrastructure
begun in the second half and planned to continue throughout
the next period, will end with the worldwide roll-out of an
enhanced private banking system, supported from a global data
centre located in Geneva.

Operating profit before amortisation of goodwill was £147
million, after charging £36 million for the cost of funding
the acquisition.

Net interest income was £150 million. Customer deposits
remained stable throughout the year, while challenging market
conditions saw a slight fall in demand for leveraged
investment facilities. Less interest rate risk was taken
during 2000 and there was some reduction in margins, mainly
due to a change in funding policies but also in response to
aggressive competitor strategies.

Other operating income was £153 million.  Significantly
higher volumes of client securities transactions early in the
year contributed to commissions growth of £16 million.
Foreign exchange trading was also strong, while gains on
sales of securities were less than in 1999.  Other operating
income included a one-off gain on the purchase and early
cancellation of subordinated debt.

Operating expenses before the amortisation of goodwill were
£160 million.  Cost savings were made on the consolidation of
operations in Switzerland. There was substantial investment
in IT infrastructure.

Credit Commercial de France

The integration of CCF has proceeded smoothly since its
acquisition.  Benefits have already been realised in terms of
increased revenues and favourable customer reaction.

CCF's business and corporate objectives are closely aligned
to those of HSBC. It has 682 branches and provides personal
banking services to over one million predominantly mass-
affluent customers. During 2000, a further 21 branches were
opened and the acquisition of Banque Pelletier was completed.
In addition to this strong focus on personal banking, CCF
also provides value-added services to large corporates and
has a well-regarded wealth management capability. The
following commentary on underlying 2000 performance is based
on CCF's French GAAP results adjusted to be on a comparable
basis to the 1999 results. On a UK GAAP basis, CCF's
operating profit before amortisation of goodwill was £36
million for the period owned by the bank.

CCF's operating income increased 10 per cent and its pre-tax
profit rose by 20 per cent compared with 1999. All major
business lines contributed to this performance.

In retail and commercial banking, operating income grew by
10 per cent and operating profit by 29 per cent reflecting
higher volumes in the domestic network. This was primarily
driven by 13 per cent growth in average retail banking sight
balances and 16 per cent growth in average retail banking
customer loans. Wealth management income also grew strongly.
Fee and commission income grew by 15 per cent which
represented 44 per cent of operating income.

Operating income in corporate and investment banking grew by
14 per cent reflecting both strong demand for financing from
large corporates and improved margins. The integration with
HSBC has already had a favourable impact in the development
of activities with major corporates, with a significant rise
in the number of euro-denominated bond issues managed.

Asset management and private banking operating income
increased by 26 per cent. Growth was particularly robust in
asset management where operating income was 36 per cent
higher. Funds under management by CCF grew by 8 per cent to
£52 billion despite the negative impact of market trends
towards the end of the year.

Consolidated Profit and Loss Account For the Year Ended 31 December 2000


Figures in £m                         2000                     1999
                        HSBC Bank                                  
                        excluding   Acquisit-                       
                     acquisitions        ions    HSBC Bank    HSBC Bank 
                                                                        
Interest receivable          6440       1,359        7,799        5,653 
Interest payable            (3952)     (1,131)      (5,083)      (3,262)
Net interest income         2,488         228        2,716        2,391 
Dividend Income                 3           3            6            2 
Fees and commissions                                                     
  receivable                1,987         255        2,242        1,851 
Fees and commissions                                                    
  payable                    (364)        (39)        (403)        (363)
Dealing profits               312          42          354          201 
Other operating income        466          40          506          455 
Other income                2,404         301        2,705        2,146 
Operating income            4,892         529        5,421        4,537 
Administrative expenses    (2,332)       (327)      (2,659)      (2,151)
Depreciation and                                                          
  amortisation                                                            
- tangible fixed assets      (339)        (25)        (364)        (313)
- goodwill                     (5)       (111)        (116)          (3)
Operating expenses          2,676        (463)      (3,139)      (2,467)
Operating profit before                                                 
  provisions                2,216          66        2,282        2,070 
Provisions                                                                 
- provisions for bad and                                                
  doubtful debts             (252)          8         (244)        (281)
- provisions for                                                           
  contingent liabilities                                                   
  and commitments             (20)          -           (20)        (50)
Amounts written off fixed                                                  
  asset investments             -          (2)          (2)          (3)
Operating profit            1,944          72        2,016        1,736 
Share of operating                                                      
  loss in associated                                                    
  undertakings                                         (47)         (34)
Gains on disposal of                                                    
- investments                                           75           21 
- tangible fixed assets                                  2            1 
Profit on ordinary                                    
  activities before tax                              2,046        1,724
Tax on profit on ordinary                                                 
  activities                                          (603)        (518)
Profit on ordinary                                   
  activities after tax                               1,443        1,206
Minority interests                                                         
-  equity                                              (83)          (5)
-  non equity                                          (15)           - 
Profit for the                                                             
  financial year                                                           
  attributable
  to shareholders                                    1,345         1,201 
Dividends (including                                                       
  amounts attributable
  to non-equity                                    
  shareholders)                                     (1,200)       (1,147)
Retained profit for the                                
  year                                                 145            54  
Basic and diluted                                                          
  earnings per ordinary                                                    
  share (pence)                                      162.6         144.8 


Consolidated Balance Sheet At 31 December 2000

Figures in £m                                2000         1999 
                                                               
Assets                                                         
Cash and balances at central banks          1,626        1,306 
Items in the course of collection from                         
  other banks                               2,430        1,776 
Treasury bills and other eligible bills     5,699        4,026 
Loans and advances to banks                29,821       12,226 
Loans and advances to customers            80,521       57,592 
Debt securities                            34,185       14,836 
Equity shares                               1,968           99 
Interests in associated undertakings          290           87 
Intangible fixed assets                     8,211           55 
Tangible fixed assets                       4,359        3,331 
Other assets                               13,698        9,903 
Prepayments and accrued income              2,395        1,231 
                                                               
Total assets                              185,203      106,468 
                                                               
Liabilities                                                    
Deposits by banks                          29,141       11,780 
Customer accounts                         102,188       66,094 
Items in the course of transmission to                         
  other banks                               1,431        1,139 
Debt securities in issue                    9,307        3,945 
Other liabilities                          18,404       13,179 
Accruals and deferred income                2,776        1,051 
Provisions for liabilities and charges                         
- deferred taxation                           621          509 
- other provisions for liabilities and                         
  charges                                     717          489 
Subordinated liabilities                                       
- undated loan capital                      1,485        1,259 
- dated loan capital                        3,727        2,114 
Minority interests                                             
- equity                                      161           41 
- non-equity                                  561            - 
                                                               
Called up share capital                       797          797 
Share premium account                      11,063        1,986 
Revaluation reserves                          104           77 
Profit and loss account                     2,720        2,008 
                                                               
Shareholders' funds (including non-        14,684        4,868 
  equity interests)
                                                               
Total liabilities                         185,203      106,468 
                                                               


Other Primary Financial Statement

Figures in £m

Statement of Total Consolidated Recognised Gains and Losses
For the Year Ended 31 December 2000

                                             2000        1999  
                                                               
Profit for the financial year attributable                     
  to shareholders                           1,345       1,201  
Unrealised surplus on revaluation of land                      
  and buildings                                28          29  
Exchange and other movements                  608           5  
                                                               
Total recognised gains and losses for the                      
  year                                      1,981       1,235  
                                                               


Statement of Consolidated Cash Flows For the Year Ended 31 December 2000

Figures in £m                                  2000            1999 
                                                                     
Net cash inflow from operating                                      
  activities                                  2,687           7,297 
                                                                    
Dividends received from associated                                  
  undertakings                                    2               6 
                                                                    
Returns on investments and                                          
  servicing of finance                                              
Interest paid on finance leases and                                 
  similar
  hire purchase contracts                       (11)            (12)
Interest paid on subordinated loan                                  
  capital                                      (268)           (214)
Dividends paid to minority                                          
  interests                                     (11)             (1)
Preference dividends paid                       (49)            (44)
Net cash (outflow) from returns on                                  
  investments and servicing of                                      
  finance                                      (339)           (271)
                                                                    
Taxation paid                                  (562)           (506)
                                                                    
Capital expenditure and financial                                   
  investment:                                                       
Purchase of investment securities           (40,752)        (27,825)
Proceeds from sale of investment                                    
  securities and amounts repaid              39,592          24,554 
Purchase of tangible fixed assets              (665)           (419)
Proceeds from sale of tangible                                      
  fixed assets                                   78              80 
Net cash (outflow) from capital                                     
  expenditure and                                                   
  financial investments:                     (1,747)         (3,610)
                                                                    
Acquisitions and disposals                                           
Net cash outflow from acquisition of                                
  interest in subsidiary                                            
  undertakings                               (8,027)            (74)
Purchase of interest in associated                                  
  undertakings and other                                            
  participating interests                       (23)            (41)
Proceeds from disposal of associated                                
  undertakings and other                                            
  participating interests                        88               4 
Proceeds from disposal of subsidiary                                
  undertakings                                   21               - 
Net cash (outflow) from acquisitions                                
  and disposals                              (7,941)           (111)
                                                                    
Equity dividends paid                          (850)         (1,150)
                                                                    
Net cash (outflow)/inflow before                                    
  financing                                  (8,750)          1,655 
                                                                    
Financing                                                           
Issue of ordinary share capital               9,033               - 
Subordinated loan capital issued              1,077             238 
Subordinated loan capital issued to                                 
  minority interest                             524               - 
Subordinated loan capital repaid               (149)           (295)
                                                                    
Net cash inflow/(outflow) from                                      
  financing                                  10,485             (57)
                                                                    
Increase/(decrease) in cash                   1,735           1,598 

Note to the statement of consolidated cash flows

Reconciliation  of  operating profit to  net  cash  flow  from
operating activities

Figures in £m                                 2000         1999 
                                                                
Operating profit                             2,016        1,736 
                                                                
Change in prepayments and accrued income      (398)          76 
Change in accruals and deferred income         363          (89)
Interest on finance leases and similar hire                     
  purchase contracts                            11           12 
Interest on subordinated loan capital          287          238 
Depreciation and amortisation                  480          316 
Amortisation of discounts and premiums         (25)         118 
Provisions for bad and doubtful debts          244          281 
Loans written off net of recoveries           (227)        (171)
Provisions for liabilities and charges          84          136 
Provisions utilised                           (102)         (79)
Amounts written off fixed asset investments      -            3 
                                                                
Net cash inflow from trading activities      2,733        2,577 
                                                                
Change in items in the course of collection                     
from other banks                                68          267 

Change in treasury bills and other eligible         
  bills                                        145      (1,439)
Change in loans and advances to banks       (2,091)         255 
Change in loans and advances to customers   (4,932)      (4,153)
Change in other securities                  (2,839)       7,521 
Change in other assets                        (449)       2,556 
Change in deposits by banks                 (2,051)        (171)
Change in customer accounts                 11,906        4,111 
Change in items in the course of                                
transmission to other banks                   (150)         (77)
Change in debt securities in issue             (68)      (1,094)
Change in other liabilities                    405       (3,008)
Elimination of exchange differences and                         
  other non-cash movements                      10          (48)
                                                                
Net cash inflow from operating activities    2,687        7,297 
                                                                

Additional Information

Figures in £m                                  2000            1999 
                                                                    
1.          Other operating income                                  
                                                                    
Dividend income                                   6               2 
                                                                    
Fees and commissions receivable               2,242           1,851 
Fees and commissions payable                   (403)           (363)
                                              1,839           1,488 
                                                                    
Dealing profits                                                     
  Foreign exchange                              258             162 
  Interest rate derivatives                      23              11 
  Debt securities                                51              57 
  Equities and other trading                     22             (29)
                                                354             201 
                                                                    
Operating lease income                          316             314 
Increase in the value of long-term                                 
  assurance business attributable to                                
  shareholders                                  115              99 
Other                                            75              42 
                                                                    
Total other operating income                  2,705           2,146 



Figures in £m                                 2000           1999 
                                                                  
                                                                  
2.          Operating expenses                                    
                                                                  
Staff costs                                  1,681          1,372 
Premises and equipment                                            
  (excluding depreciation)                     324            272 
Other administrative expenses                  654            507 
                                                                  
Administrative expenses                      2,659          2,151 
Depreciation                                   364            313 
Goodwill                                       116              3 
                                                                  
Total operating expenses                     3,139          2,467 
                                                                  
Staff numbers at 31 December (full time                           
  equivalent)                               61,923         45,742 



Figures in £m                                 2000           1999 
                                                                  
                                                                  
3.         Provisions for bad and doubtful debts                  
                                                                  
Loans and advances to customers                                   
                                                                  
Specific charge:                                                  
                                                                  
New provisions                                                    
  UK Banking                                   340            425 
  International Banking                         24             30 
  Treasury and Capital Markets                   -              - 
  HSBC Republic                                  -              - 
  CCF                                           22              - 
                                               386            455 
Releases and recoveries                                           
  UK Banking                                  (115)          (124)
  International Banking                        (28)           (53)
  Treasury and Capital Markets                  (4)            (4)
  HSBC Republic                                  -              - 
  CCF                                          (23)             - 
                                              (170)          (181)
                                               216            274 
General charge                                  27              7 
                                                                  
Customers' bad and doubtful debt charge        243            281 
                                                                  
Loans and advances to banks                                       
  Specific charge net                            1              - 
                                                                  
Total bad and doubtful debt charge             244            281 




Figures in £m                                  2000            1999 
                                                                    
4.         Provisions against advances                              
                                                                    
Loans and advances to customers                                     
  Specific provisions                         1,412             796 
  General provisions                            528             358 
                                              1,940           1,154 
Loans and advances to banks                                         
  Specific provisions                            19               7 
                                                                    
Total                                         1,959           1,161 
                                                                    
Interest in suspense                             69              68 
                                                                    
Non-performing loans and advances                                   
                                                                    
Banks                                            10               7 
                                                                    
Customers                                     2,220           1,528 
                                                                    
Total non-performing loans and                                      
advances(net of suspended interest)           2,230           1,535 
                                                                    
Non-performing loans and advances                                   
  to customers as a percentage of                                   
  gross loans and advances to                                        
  customers                                     2.7%            2.6%
                                                                    
Customer specific provisions                                        
  outstanding as a percentage of                                    
  non-performing loans                                              
  and advances to customers                    63.6%           52.1%
                                                                    
Total customer provisions cover as                                  
  a percentage of non-performing                                    
  loans and advances to customers              87.4%           75.5%


5.   Acquisitions

On 1 January 2000, a subsidiary of HSBC Bank plc acquired a
50.8 per cent interest in HSBC Republic Holdings (Luxembourg)
S.A. from HSBC Holdings plc. HSBC Republic Holdings
(Luxembourg) S.A., through its subsidiary undertakings,
provides private banking and related services within Europe.

On 31 October 2000, the bank acquired a 100 per cent interest
in  Credit Commercial de France S.A. ('CCF') from HSBC
Holdings plc.  CCF provides banking services primarily within
France.

As part of a HSBC Group restructuring of its European private
banking interest, on 15 December 2000, the interest in HSBC
Republic Holdings (Luxembourg) S.A. was exchanged for a 97.4
per cent interest in HSBC Private Banking Holdings (Suisse)
S.A. HSBC Private Banking Holdings (Suisse) S.A. acquired
HSBC Republic Bank (Suisse) S.A. and the other subsidiary
undertakings of HSBC Republic Holdings (Luxembourg) S.A.

Goodwill of £7,844 million arose on these acquisitions.

6.   Basis of preparation

The Accounting Policies adopted are consistent with those
described in the 1999 Annual Report and Accounts.

7.   Statutory accounts

The information in this announcement does not constitute
statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The statutory accounts for the year ended
31 December 2000, which are combined with HSBC Bank plc's
Annual Report on Form 20-F to the US Securities and Exchange
Commission, will be delivered to the Registrar of Companies
in England and Wales in accordance with Section 242 of the
Act. The auditors have reported on these accounts; their
report was unqualified and did not contain a statement under
Section 237(2) or (3) of the Act.

8. Subsequent event

On 22 February 2001, the French Finance Ministry announced
the sale of Banque Hervet to CCF for a consideration of 
FF 3.471 billion.

9. Other information

Copies of this announcement are available from the Head of
Group External Relations, HSBC Holdings plc, 10 Lower Thames
Street, London EC3R 6AE, or from the paying agent for the US
dollar-denominated preference shares, at the same address.

HSBC Bank plc is a member of the Personal Investment
Authority, the Investment Management Regulatory Organisation
and The Securities and Futures Authority.