HSBC's US Subsid Results

HSBC Hldgs PLC
1 May 2001


                        HSBC USA INC.
           FIRST QUARTER 2001 RESULTS - HIGHLIGHTS


* Net income in the first quarter of 2001 increased by 20.7 per
  cent to US$181 million from US$150 million in the first
  quarter of 2000.

* Cash earnings^ in the first quarter increased 18.1 per cent
  to US$222 million from US$188 million for the same period in
  2000.

* The cost:income ratio (excluding goodwill amortisation and
  restructuring costs) for the first quarter of 2001 was 52.7
  per cent, compared to 57.6 per cent in the first quarter of
  2000.

* Tier 1 capital to risk-weighted assets was 8.1 per cent at
  the end of the first quarter of 2001 compared to 8.8 per cent
  at the end of the first quarter of 2000.

* Cash earnings^ as a percentage of average common equity for
  the first quarter of 2001 were 13.1 per cent compared to 11.4
  per cent during the first quarter of 2000.

* Client assets under administration at 31 March 2001 were
  US$46.3 billion, of which US$30.9 billion were funds under
  management and US$15.4 billion were custody accounts.

^ Cash earnings are primarily net income after preferred
  dividends and after adding back goodwill amortisation.

Note: figures for 2000 have been restated to exclude
investments transferred to HSBC North America Inc. during
2001.

HSBC USA Inc.                                          Financial Commentary

HSBC USA Inc. recorded net income of US$181 million in the
first quarter of 2001, up 20.7 per cent from US$150 million
in the first quarter of 2000. Cash earnings for the quarter
were US$222 million, compared to US$188 million for the
comparable period in 2000.

Youssef Nasr, Chief Executive Officer of HSBC USA Inc., said:
'We are pleased with the results that we have reported today.
Our focus continues to be on cash earnings and in the first
quarter we reported an 18.1 per cent increase from the first
quarter of last year

'The year 2000 was one where much of our time and effort was
spent efficiently integrating Republic and HSBC. As we
entered 2001, we focused our attention on prudently investing 
in our core businesses to meet our objective of maximizing 
long term shareholder value.'

Despite a more challenging economic environment, HSBC USA
Inc.'s business remained strong in the first quarter. Total
assets were US$84.5 billion compared to US$84.0 billion at 31
March 2000. Total deposits were US$57.7 billion at 31 March
2001, up 5.5 per cent from US$54.7 billion at 31 March 2000
and compared to US$56.0 billion at 31 December 2000. Total
loans at 31 March 2001 were US$41.0 billion, up 4.7 per cent
from US$39.2 billion at 31 March 2000 and compared to US$40.4
billion at 31 December 2000. Residential mortgage lending saw
a significant increase in volume as a result of the high
level of refinancing activity as interest rates moved lower
during the first quarter. HSBC Mortgage Corporation, a
subsidiary of HSBC Bank USA, with more than 300,000
customers, funded US$1.3 billion in mortgages during March.
This compares to US$6.4 billion in mortgages funded for all
of 2000. Approximately 40 per cent of this volume will be
held in the bank's loan portfolio, with the remaining volume
sold while retaining the servicing

HSBC Bank USA continues to emphasise the growth of its wealth
management business. Total funds under management at 31 March
2001 were US$30.9 billion, an increase of US$4.4 billion, or
16.6 per cent since 31 March 2000. Including custody
balances, assets under administration totalled US$46.3
billion at 31 March 2001. Total on and off balance sheet
customer holdings in International Private Banking (New York,
Florida and California) increased by more than 15 per cent
from 31 March 2000. Revenues from domestic wealth management
were US$48.7 million during the first quarter of 2001, an
increase of 6.8 per cent compared to the same period in 2000.
Life insurance revenues for the first quarter of 2001 were US$5.3 million,
an increase of 47 per cent from US$3.6 million for the first
quarter of 2000.

As part of its strategy of providing customers with multiple
choices for product delivery, HSBC Bank USA launched a
comprehensive internet banking product in April 2000. As of
31 March 2001, more than 115,000 customers had registered for
the service, up from approximately 80,000 at year-end and the
site was receiving over 25,000 visits daily. In November
2000, HSBC Brokerage (USA) Inc. began the rollout of online
discount brokerage. At 31 March 2001, over 2,000 discount
brokerage customers had signed up for this service.

Revenues were up 13.2 per cent in the first quarter of 2001
compared to the first quarter of 2000. Net interest income
increased, principally as a result of a higher level of loans
and core deposits. Other operating income benefited from the
sale of securities as well as improvements in wealth
management and mortgage business. A one-time gain of US$19 million was
recorded from the sale of shares in Canary Wharf, a
retail/office development investment project in London,
England.

Operating expenses were up US$20 million or 4 per cent from
the prior year due primarily to business expansion and
infrastructure investment initiatives, and also slightly
higher restructuring and goodwill expenses. The business
initiatives are focused on growing the private banking,
wealth management, and treasury businesses. During the first 
quarter HSBC hired several senior executives to expand the bank's 
foreign exchange operation in the US. Aside from these
initiatives, and after adjusting for inflation and business
transfers, expenses were down approximately 7 per cent year
to year.

During the first quarter, the overall credit quality of the 
portfolio remained stable. Provisions for the quarter were 
US$48 million which more than covered the quarterly charge-off 
amount of US$21 million.

Common equity was US$6.8 billion at 31 March 2001 compared to
US$6.7 billion at 31 March 2000. The ratio of tier 1 capital
to risk-weighted assets was 8.1 per cent compared to 8.8 per
cent at 31 March 2000. The ratio of total capital to risk-
weighted assets was 13.2 per cent compared to 14.9 per cent
at 31 March 2000. The ratio of cash earnings to common equity
was 13.1 per cent compared to 11.4 per cent at 31 March 2000

On 19 March 2001, HSBC Bank USA opened a new branch in Coral
Gables, Florida, bringing to eight the total number of
branches in Florida. Through this new location, HSBC will be
able to offer Florida residents easier access to HSBC
products and services. In addition, the new branch will offer
our New York-based customers, as well as international
customers that travel to Florida for business or vacation,
the service levels they are accustomed to receiving at HSBC
locations around the world.

About HSBC Bank USA
HSBC Bank USA is a leading financial services organization
with combined assets of the bank and its US holding company,
HSBC USA Inc., of US$84.5 billion. The organization is the
third largest depository institution and has the most
extensive branch network in New York State. In addition to
having more than 425 branches throughout New York, the
institution has eight branches in Florida, two in
Pennsylvania, three in California and 17 in Panama. HSBC USA
Inc. is the eleventh largest US holding company in total assets
and is an indirectly-held, wholly-owned subsidiary of HSBC
Holdings plc (NYSE: HBC), which is headquartered in London.
The HSBC Group has some 6,500 offices in 79 countries and
territories in Europe, the Asia-Pacific region, the Americas,
the Middle East and Africa. For more information about HSBC
Bank USA and its products and services visit www.us.hsbc.com.

HSBC USA Inc.                                                Summary

                                 Quarter ended     Quarter ended
                                       31Mar01            31Mar00 ^^
Figures in US$ millions
Net income                                 181                150
Cash earnings^                             222                188

Performance ratios (%)
Cash earnings as a percentage of
  average common equity                   13.1               11.4
Cost:income ratio
 (excluding goodwill amortisation
 and restructuring costs)                 52.7               57.6
Staff numbers (full-time
 equivalents)                           14,406             14,283
Average balances
Loans                                   40,402             38,639
Earning assets                          77,450             73,092
Total assets                            85,046             81,709
Deposits                                57,712             53,974
Common equity                            6,867              6,637
Net yields on total assets
(tax equivalent basis) (%)                 2.6                2.6
Assets under administration
Funds under management                  30,945             26,508
Custody accounts                        15,339             16,505
Total assets under administration       46,284             43,013

Credit information
Non-accruing loans                         442                344
Net charge offs                             21                 28
Allowance available for credit
  losses
- Balance at end of period                 553                638
- As a percentage of-accuring loans      125.1 %            185.4 %
- As a percentage of loans outstanding    1.35 %             1.63 %
Capital (at end of period)
Common equity                            6,757              6,670
As a percentage of total assets            8.0 %              7.9 %
Capital ratios (%)
Leverage ratio                             5.6                5.8
Tier 1 capital to risk-weighted assets     8.1                8.8
Total capital to risk-weighted assets     13.2               14.9

^     Cash earnings are primarily net income after preferred
      dividends and after adding back
      goodwill amortisation.
^^    Restated to exclude investments transferred to HSBC
      North America Inc. during 2001.

HSBC USA Inc.                              Consolidated Statement of Income

                                                Quarter          Quarter
                                                  ended            ended
Figures in US$ thousands                        31Mar01          31Mar00 ^^

Interest income
Loans                                           785,569          738,674
Securities                                      375,662          384,542
Trading assets                                   60,920           28,343
Other short-term investments                    115,423          106,475
Total interest income                         1,337,574        1,258,034

Interest expense
Deposits                                        582,840          529,112
Short-term borrowings                           120,388           96,755
Long-term debt                                   90,568          104,183
Total interest expense                          793,796          730,050

Net interest income                             543,778          527,984

Provision for credit losses                      47,550           27,993
Net interest income, after provision for
credit losses                                   496,228          499,991

Other operating income
Trust income                                     22,838           20,143
Service charges                                  43,903           43,508
Mortgage banking revenue                         12,197            6,588
Other fees and commissions                       76,499           79,434
Trading revenues                                 50,398           51,408
Security gains (losses)                          69,179           (2,402)
Other income                                     17,433           12,272
Total other operating income                    292,447          210,951

Total income from operations                    788,675          710,942

Other operating expenses
Salaries and employee benefits                  243,160          248,553
Occupancy expense, net                           38,064           41,722
Other expenses                                  165,323          137,651
Operating expenses before goodwill
amortisation                                    446,547          427,926
Goodwill amortisation                            45,091           43,731
Total operating expenses                        491,638          471,657

Income before taxes and cumulative effect
of accounting change                            297,037          239,285
Applicable income tax expense                   115,800           89,447
Income before cumulative effect of
accounting changes                              181,237          149,838
Cumulative effect of accounting changes-
implementation of FAS 133                           451                -

Net income                                      180,786          149,838

^^   Restated to exclude investments transferred to HSBC
     North America Inc. during 2001

HSBC USA Inc.                                   Consolidated Balance Sheet

                                          31Mar01      31Dec00        31Mar00
Figures in US$ thousands

Assets
Cash and due from banks                 1,987,039     1,860,713      1,825,184
Interest bearing deposits with banks    4,693,344     5,129,490      4,751,321
Federal funds sold and securities
purchased under resale agreements       1,115,439     1,895,492      4,197,256
Trading assets                          7,783,525     5,770,972      4,355,631
Securities available for sale          16,360,299    17,336,832     18,085,687
Securities held to maturity             5,170,467     4,260,492      4,645,274
Loans                                  41,042,167    40,417,847     39,184,059
Less - allowance for credit losses        552,664       524,984        637,953
Loans, net                             40,489,503    39,892,863     38,546,106
Premises and equipment                    794,579       777,610        748,693
Accrued interest receivable               575,546       785,286        734,394
Equity investments                         56,835        55,596         49,420
Goodwill and other acquisition          3,183,334     3,229,479      3,262,362
intangibles
Other assets                            2,276,175     2,040,325      2,813,403

Total assets                           84,486,085    83,035,150     84,014,731

Liabilities

Deposits in domestic offices
- Non-interest bearing                  4,882,753     5,114,668      6,425,345
- Interest bearing                     31,587,010    30,631,511     29,458,990
Deposits in foreign offices
- Non-interest bearing                    654,060       282,737        267,747
- Interest bearing                     20,618,917    20,013,588     18,556,610
Total deposits                         57,742,740    56,042,504     54,708,692

Trading account liabilities             3,501,281     2,766,825      2,696,379
Short-term borrowings                   7,832,579     8,562,363     10,205,206
Interest, taxes and other               3,225,862     3,232,918      3,347,120
liabilities
Subordinated long-term debt and         2,958,969     3,027,014      3,426,094
 perpetual capital notes
Guaranteed mandatorily redeemable         729,907       711,737        710,629
securities
Other long-term debt                    1,237,512     1,357,904      1,750,788
Total liabilities                      77,228,850    75,701,265     76,844,908

Shareholders' equity
Preferred stock                           500,000       500,000        500,000

Common shareholders' equity
- Common stock                                  4             4              4
- Capital surplus                       6,022,018     6,104,264      6,097,631
- Retained earnings                       611,886       612,798        614,531
- Accumulated other comprehensive
  income (loss)                           123,327       116,819       (42,343)
Total common shareholders' equity       6,757,235     6,833,885      6,669,823
Total shareholders' equity              7,257,235     7,333,885      7,169,823
Total liabilities and shareholders'
  equity                               84,486,085    83,035,150     84,014,731