HSBC Mexico subsid results

HSBC Holdings PLC
29 April 2003



                             GRUPO FINANCIERO BITAL

                         QUARTERLY RESULTS - HIGHLIGHTS

* Net income up 279 per cent to MXP 405 million for the first quarter ended 31
March 2003, as compared to the first quarter ended 31 March 2002.

* Operating income before provisions for loan losses up by 102 per cent to MXP
1,615 million.

* Cost:income ratio of 61 per cent, compared to 76 per cent for the quarter
ended 31 March 2002.

* Assets up 16 per cent to MXP 158 billion, compared with 31 March 2002.

* Total capital ratio of 11.98 per cent, compared to 10.96 per cent at 31
December 2002.

Grupo Financiero Bital First Quarter 2003 Results

Grupo Financiero Bital (GFBital) achieved net income of MXP 405 million for the
first quarter ended 31 March 2003. This result was 279 per cent higher than the
MXP 107 million reported for the same period of the previous year. The growth
from the relatively weak 2002 results reflected an improvement in net interest
income originating from higher interest rates, an increase in customer deposits
and a stronger capital base. The two principal subsidiaries, Banco Bital, and
Bital Seguros (joint venture with ING), accounted for all of this improved
performance.

Comment by Sandy Flockhart, CEO of GFBital:

"Our first quarter results were strong and ahead of expectations. The core
Personal Financial Services business lines continue to grow and the Bank was
well positioned to benefit from market volatility and higher local interest
rates.

"The Mexican economy has performed well in the light of world events, with the
higher price of oil leading to higher levels of international reserves.

"We have made important strides in the integration of GFBital into the HSBC
network, although significant work remains to be done. The existing HSBC Mexico
operations will be merged into GFBital in the second quarter subject to receipt
of the necessary regulatory approvals. The resulting business synergies will
contribute to the development within GFBital of traditionally strong HSBC
business lines such as Trade Finance, Corporate Banking, Private Banking, and
Treasury."

Financial Review

Total revenues increased by 22 per cent to MXP 4,098 million in the quarter
ended 31 March 2003, compared to MXP 3,363 million for the same quarter of 2002.
Most of the increase was driven by higher net interest income as the net
interest margin improved from 6.13 per cent to 6.62 per cent in the first
quarter of 2003. A 16 per cent increase in customer deposits and a stronger
capital base were the principal factors leading to these higher revenues.

Fees and commissions of MXP 1,267 million were up 21 per cent from 2002, due
principally to higher transaction volumes on Personal Financial Services and
Commercial Banking related products such as credit cards, deposit services, and
ATMs.

Operating expenses decreased by 3.1 per cent compared to the quarter ended 31
March 2002. The reduction resulted from improved expense discipline and
leveraging the HSBC Group's expertise. The cost:income ratio was 61 per cent,
which compared favourably with the level of 76 per cent reported in the same
period of the previous year.

The size and composition of the balance sheet, up MXP 23.1 billion or 16.9 per
cent from 31 March 2002, principally relates to the addition of Banco
Atlantico's assets and liabilities effective 1 October 2002, which was prior to
HSBC's acquisition of GFBital. Credit quality has improved from year-end 2002
with non-performing loans (NPLs) down 3.7 per cent and the ratio of loan loss
reserves to NPLs strengthening from 115.8 per cent to 121.5 per cent. The
consumer loan portfolio has been steadily growing and a number of corporate
credit facilities have recently been approved.

GFBital is one of the five largest banking and financial services institutions
in Mexico, with some 1,400 branches, 4,000 ATMs, and over 17,000 employees.
Subject to the receipt of the necessary regulatory approvals, the existing HSBC
Mexico banking operation will be merged into GFBital in the second quarter of
2003. This merger will add 100 HSBC employees and 1,500 corporate, commercial
and private banking client relationships to GFBital.

GFBital is a directly held, 99.76 per cent owned subsidiary of HSBC Holdings
plc. Headquartered in London, with over 9,500 offices in 80 countries and
territories and assets of US$759 billion at 31 December 2002, the HSBC Group is
one of the world's leading banking and financial services organisations.

Grupo Financiero Bital Consolidated balance sheet


                                                             At                     At                 At
                                                      31 Mar 03             31 Dec 02*         31 Mar 02*
Figures in constant MXP millions
Assets
Funds available                                          30,731                 33,049             51,659
Investments in securities                                 7,927                  8,672             11,084
Receivable under repo agreements                            100                     12                  -

Loans to IPAB/Fobaproa                                   56,396                 58,258             19,646
Other accruing loans                                     49,267                 50,297             43,826
Non-performing loans                                     13,201                 13,712              4,834
Total loan portfolio                                    118,864                122,267             68,306
Minus: Reserve for loan loss                            (16,044)               (15,877)           (7,563)
Net loan portfolio                                      102,820                106,390             60,743

Foreclosed assets                                           739                    708                714
Property, furniture and equipment                         3,275                  3,367              3,787
Permanent equity investments                              1,124                  1,098                750
Deferred taxes                                            3,871                  4,110              4,321
Other assets                                              7,599                  5,213              3,630
Total assets                                            158,186                162,619            136,688

Liabilities
Demand deposits                                          75,252                 80,929             68,034
Time deposits                                            52,742                 51,335             45,633
Total deposits                                          127,994                132,264            113,667
Loans from banks and other institutions                  10,247                 10,834              8,400
Payable under repo agreements                                63                     64                 31
Subordinated debentures                                   1,925                  2,200              1,597
Other liabilities                                         7,587                  7,310              4,802
Total liabilities                                       147,815                152,672            128,497
Capital
Paid-in capital                                          20,032                 20,032             11,533
Earned capital                                           (9,703)               (10,125)            (3,413)
Minority interest                                            42                     40                 71
Total shareholders' equity                               10,371                  9,947              8,191
Total liabilities & capital                             158,186                162,619            136,688

* In accordance with Mexican GAAP, figures appear in constant pesos at 31 March
2003, which means prior period figures are adjusted to account for the
inflationary impact in order to enhance comparability. Fourth quarter 2002
figures reflect the financial strengthening exercise carried out by HSBC post
acquisition.

Grupo Financiero Bital Consolidated income statement
                                                       Quarter ended        Quarter ended        Quarter ended
 Figures in constant MXP millions                          31 Mar 03           31 Dec 02*            31 Mar 02 *
Interest income                                                5,118                4,802                4,477
Interest expense                                               2,444                2,508                2,613
Monetary position (net interest income)                          (27)                  67                   13
Net interest income                                            2,647                2,361                1,877
Provision for loan loss                                          949                4,837                  663
Adjusted net interest income                                   1,698               (2,476)               1,214
Fees and Commissions                                           1,267                1,368                1,049
Trading income                                                   184                  237                  437
Total net revenues                                             3,149                 (871)               2,700
Operating expenses                                             2,483                4,769                2,562
Operating income                                                 666               (5,640)                 138
Other income (expenses)                                          (13)              (1,771)                (119)
Net income before taxes                                          653               (7,411)                  19
Income tax and profit sharing                                    (84)                  75                  (36)
Deferred income tax                                             (197)                 330                   97
Net income before subsidiaries                                   372               (7,006)                  80
Undistributed net income from subsidiaries                        35                   29                   28
Net income from continuing operations                            407               (6,977)                 108
Extraordinary & non-recurrent                                      -                    1                    -
Minority interest                                                 (2)                  65                   (1)
Net income (loss)                                                405               (6,911 )                107
Breakdown of net income by subsidiary
                                                       Quarter ended        Quarter ended        Quarter ended
Figures in constant MXP millions                           31 Mar 03           31 Dec 02*           31 Mar 02*
                                             Ownership %
Banco Internacional (Bank)                         99.55         374               (6,918)                  79
Seguros Bital (Insurance)                          51.00          36                   29                   19
Fianzas Mexico Bital (Bonding)                     97.22          (4)                 (10)                   8
Casa de Bolsa Bital (Stock Broker)                 99.99           -                   (9)                  (3)
Almacenadora Bital (Warehousing)                   99.98          (1)                   -                    2
Operadora de Fondos (Inv. Fund Mngr.)              99.90           -                    -                    -
GFBital (Holding Co.)                             100.00           -                   (3)                   2
Total net income (loss)                                          405               (6,911)                 107

* In accordance with Mexican GAAP, figures appear in constant pesos at 31 March
2003, which means prior period figures are adjusted to account for the
inflationary impact in order to enhance comparability. Fourth quarter 2002
figures reflect the financial strengthening exercise carried out by HSBC post
acquisition.


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