HSBC Subsidiary 2001 Results

HSBC Holdings PLC
11 April 2002


The following text is the English translation of a news release issued today in
Germany by HSBC Holdings plc's subsidiary.


                     HSBC TRINKAUS & BURKHARDT 2001 RESULTS

                             NET PROFITS ROSE AGAIN


HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly owned
by HSBC Holdings plc, successfully met the challenges of 2001, a year marked by
difficult conditions in financial markets. Pre-tax profits increased 4.3 per
cent to EUR148.3 million, due to exceptional income, largely deriving from gains
on the exchange of shares in Ergo Versicherungsgruppe AG for shares of Munchener
RuckversicherungsGesellschaft AG and the de-consolidation of pulsiv AG.

Net profits rose strongly by 23.5 per cent to EUR113.1 million. Operating
profits fell by 27 per cent to just under EUR93 million. The Chairman of the
Managing Partners, Dr Sieghardt Rometsch, emphasised "that the Partners have
reason to be pleased both with the absolute level of net profits after tax, and
also in relative terms, reflecting on the decline in profits reported by many
banks in 2001."

Net fees and commissions, the most important element of profits, declined by
14.4 per cent to EUR197.3 million, compared to their record contribution in
2000. Net interest income after credit risk provisions increased 10.1 per cent
to EUR75.4 million. New risk provisions, without any relaxation of strict
criteria, rose only slightly from EUR4.2 million in 2000 to EUR4.3 million.
Profit from trading activities fell 18.1 per cent to EUR54.6 million. Operating
expenses fell slightly by 0.5 per cent to EUR237.4 million, although the number
of staff employed rose from 1,517 to 1,600.

Earnings per share rose from EUR3.62 in 2000 to EUR4.20 in 2001. At the Annual
General Meeting on 5 June 2002 the payment of a dividend of EUR1.75 per share
will be recommended (2000 : EUR1.75 per share), plus a bonus dividend of EUR1.00
per share (2000 : EUR0.50 per share). Through the EUR0.50 increase in the bonus
dividend it is intended that share-holders will participate in the exceptional
income from the Ergo share exchange.

Consolidated assets grew by 6.3 per cent in 2001, to EUR11.0 billion. The total
capital base at 31 December 2001 was 10.9 per cent of risk-weighted assets. The
core capital ratio was 7.5 per cent.

At 31 December 2001, total outstanding derivatives business was EUR82.6 billion
(2000 : EUR85.1 billion) with a market value of EUR1.2 billion (EUR1.3 billion).
Aggregate market risk rose from EUR8.2 million in 2000 to EUR14.2 million in
2001.

The weakness of securities markets and the gloomy economic outlook affected in
2001 all three client-driven business segments of the bank - private banking,
corporate banking, and institutional investors. Dr Sieghardt Rometsch once again
drew attention to the balanced earnings structure of the bank. Business with
institutional investors contributed 24 per cent of profits, private banking 25
per cent and corporate banking 28 per cent. The portion attributable to
proprietary trading was 23 per cent.

After the record year of 2000, Private Banking, dedicated to the management of
substantial private wealth, reported a decline in revenues of close to 20 per
cent. This was primarily due to heavy price falls on international stock
exchanges. Funds under management were slightly higher overall, boosted by
successful client acquisition. Average portfolio performance declined by 5.77
per cent, which in the context of a fall in the DAX index of 19.8 per cent may
be considered a satisfactory outcome.

The profit contribution of Corporate Banking in 2001 was lower than that of the
previous year. Nevertheless, the balanced composition of income streams provided
a solid revenue base. The number of special funds established for corporate
clients rose once again. Dr Rometsch highlighted : "that the bank, in
co-operation with business partners, now offers its clients support in all
aspects of corporate pension services". Corporate finance business concentrated
on advisory mandates. A large number of new customers were won in trade services
and foreign business.

The results of the Institutional Investors area were satisfactory, against the
background of weak stock markets in the first half of 2001 combined with the
powerful shocks to capital markets following 11 September. However, they fell
short of the record profits of 2000. As in that year, equities business
generated the largest portion of profits. In order to expand equities
derivatives and index-linked derivatives business with clients, the new Equities
Derivatives Group was established. Fixed income activities with institutional
clients reported revenue in line with that of the previous year. Foreign
exchange will focus in 2002 on the expansion of electronic dealing business.

Professional portfolio management handled by the bank's subsidiary HSBC Trinkaus
Capital Management GmbH performed well in an environment characterised by
reticence on the part of investors. Market share was gained in both special
funds and public investment funds. Corporate Bonds proved especially successful
in attracting new funds for investment. HSBC Trinkaus Capital Management secured
its first top ranking, in the category of performance quality, from the most
influential, independent market research analysis of special funds products.

INKA (Internationale Kapitalanlagegesellschaft mbH) increased the number of its
special investment funds by 10 to 190, and of its public investment funds by 5
to 34. The value of assets under management was maintained at the previous
year's level of EUR16.4 billion. At the end of 2001, HSBC Trinkaus Investment
Managers SA, Luxemburg managed one special fund and 30 public investment funds :
the value of assets under their management remained constant at EUR1.1 billion.
In new issues business, HSBC Trinkaus & Burkhardt achieved a new record of 972
transactions, compared to 832 in 2000. The bank participated in a total of 7
IPOs, new placements and capital issues for domestic and foreign companies. The
issue of own option certificates, and of other certificates with a wide variety
of structures, remained of great importance : the bank issued 956 such
securities during the year, compared to 790 in 2000; of these, 537 were
equity-linked, 311 index-linked and 108 linked to currencies.

Corporate finance reported significantly lower income in 2001, as new company
flotation business virtually dried up. However, through growing success in
advisory work on mergers and acquisitions this area still made a good positive
contribution to the bank's overall profitability. The modest volumes of pre-IPO
participations entered into in 1999 were completely sold or written down. In the
field of post-IPO client relations, designated sponsor mandates remained steady
at 36.

On 2 March 2001 the bank sold its majority shareholding in the internet broker
pulsiv.com to the German Savings Bank (Sparkassen) financial group. However,
HSBC Trinkaus & Burkhardt will continue in the years ahead to provide securities
back office processing services required by the company, which now trades under
the name S-Broker. This new contract further builds on the bank's good starting
position in the market for the outsourcing of securities services. In order to
enhance its product offering for securities services outsourcing, and to further
improve securities processing quality, the new securities back office processing
system GEOS will be introduced in the fourth quarter of 2002.

Despite the difficult market environment of the first three months of the
current year, the Managing Partners are cautiously optimistic and hopeful of
achieving planned results, linked to improving conditions primarily in the
second half of the year, with positive contributions from all business areas. It
is anticipated that the dividend can be maintained at EUR1.75 per share.



HSBC Trinkaus & Burkhardt 2001 Results

Consolidated figures according to International Accounting Standards


(EUR million)                                        2001                    2000               Change in
                                                                                                 per cent

1. Balance Sheet

Due from customers                                 2,926                    3,133                   (6.6)
Dealing assets                                     3,183                    3,777                  (15.7)
Customer deposits                                  5,580                    4,642                    20.2
Dealing Liabilities                                1,704                    1,500                    13.6
Shareholders Funds                                   773                      653                    18.4
Balance Sheet Total                               11,001                   10,345                     6.3


2. Profit & Loss Account

Net Interest Income                                 79.7                     72.7                     9.6
Risk Provisions                                      4.3                      4.2                     2.4
Net Commission income                              197.3                    230.5                  (14.4)
Trading Income                                      54.6                     66.7                  (18.1)
Operating Expenses                                 237.4                    238.6                   (0.5)
Operating Profit                                    92.9                    127.3                  (27.0)
Net Profit                                         113.1                     91.6                    23.5





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