HSBC Trinkaus&Burkhardt FY03

HSBC Holdings PLC
01 April 2004

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

                         HSBC TRINKAUS & BURKHARDT KGaA
                                  2003 RESULTS

HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly owned
by HSBC Holdings plc, reported a strong 51.1 per cent increase in operating
profits, to EUR86.1 million, for the financial year ended 31 December 2003. With
these results, the bank has now returned to the levels of profitability of
earlier years. Germany's economy is currently characterised by weakness and
deep-seated structural growth problems. German banks have yet to embark on
fundamental structural reforms. Costs and competition are exerting a stronger
than ever pressure for change. HSBC Trinkaus & Burkhardt has not merely accepted
the market challenges arising from this situation, but has turned them to
advantage and profit.

Profits from client business increased slightly, and continued to provide a
solid foundation for the bank. Trading profits rose by almost 200 per cent
compared to the previous year and, at EUR44.8 million, exceeded expectations.
Net income before tax grew by 68.1 per cent to EUR84.2 million. Net income after
tax grew by 78.3 per cent to EUR46.9 million. So that shareholders may
participate in the increased profits, it will be recommended to the Annual
General Meeting on 8 June 2004 that the dividend be raised to EUR1.75 per share,
compared to a dividend of EUR1.00 per share for the financial year 2002.

Net fees and commissions increased by 0.5 per cent to EUR196.4 million compared
to the previous year. As in 2002, around 70 per cent of this figure is
attributable to securities business. Net interest income rose by 6.5 per cent to
EUR75.0 million. Risk provisions of EUR7.7 million were within the expected
range, although they were EUR3.6 million higher than the very low levels seen in
2002. The reason for this is that new provisions, which were at similar levels
to the previous year, were not offset by releases of provisions to the same
extent as in 2002.

Due to prudent and rigorous credit risk management HSBC Trinkaus & Burkhardt was
able to keep risk provisions at a comparatively low level - against a background
of continuing poor economic conditions in Germany. The bank also continued to
apply its strict criteria in the assessment of provisioning requirements. Net
interest income after risk provisions rose by EUR1 million to EUR67.3 million.

Total administrative expenses rose by 1.1 per cent to EUR226.9 million. The main
reason for this moderate increase, compared to the growth in revenues, was the
cost reduction measures already introduced in the previous year. Through
sensible rationalisation efforts, the bank achieved significant savings in
non-staff administrative expenses; the number of employees declined by 53 to
1,525. However, these savings were more than offset by an increase in
profit-related remuneration and by the costs for depreciation of the GEOS
securities processing system.

Consolidated assets fell by 1.3 per cent in 2003, to EUR11.0 billion. The total
capital base at year-end as defined by the Banking Act was 11.0 per cent of
risk-weighted assets. The core capital ratio was 8.2 per cent. The bank
continues to be well capitalised.

At 31 December 2003, the total contract amount of outstanding derivatives
business was EUR78.3 billion (2002: EUR83.3 billion) with a replacement cost of 
EUR1.7 billion (2002: EUR2.2 billion). Aggregate market risk from trading
activities was EUR6.0 million (2002: EUR15.7 million). Only limited comparison
between the two years' figures is possible, as the risk measurement model was
enhanced in 2003, enabling it for the first time to take account of correlation
activities which mitigated risk.

HSBC Trinkaus & Burkhardt's business developed very positively in 2003. Looking
at the results by customer segment, the contribution of the Private Banking
division rose by 18.8 per cent to EUR30.4 million. That of Corporate Banking
fell by 6.6 per cent to EUR37 million, the year before having been heavily
influenced by a number of special transactions. However, Corporate Banking
maintained its position once again in 2003 as the most profitable division of
the bank. The Institutional Clients division achieved with EUR31.5 million a
contribution on a par with the high levels seen in the previous year. The
Proprietary Trading division, with a contribution of EUR24.5 million, regained
the level of profitability of earlier years.

Private Banking took advantage of the newly improving situation on the
securities markets from the second quarter of the year to generate a welcome
increase in operating profits. The acquisition of significant new volumes of
funds under management and advice advanced successfully, as did the extension of
the service and product range. The average performance of all funds entrusted to
the bank's management was 9.2 per cent. Conservatively managed portfolios with a
lower equities content grew by 6.8 per cent, dynamic portfolios by 16.4 per
cent.

Corporate Banking won numerous new clients and significantly extended its
business base among larger medium-sized companies and major corporations. HSBC
Trinkaus & Burkhardt is, for German corporate clients, the special gateway to
the HSBC Group. Client companies benefit from the HSBC Group's network in 79
countries and territories, above all in the debt and equity capital markets and
in international business. Clients also gain access to the Group's comprehensive
offering of technologically leading services.

Although last year in Germany, for the first time since 1968, no company
undertook an initial public offering on the stock exchange, the capital markets
gradually stabilised and slowly revived. The Corporate Finance division worked
with clients in successfully carrying out four capital increases in the fourth
quarter alone.

In our business with institutional clients, revenues declined. The reason for
this was the lower risk-taking capacity of insurance companies and pension funds
in particular, which led to a drop in equities transactions. Countering this was
a clear increase in revenues in the fixed income and derivatives sales
departments, as well as a 10 per cent fall in administrative expenses. The
operating profits of the Institutional Clients division therefore remained high,
and stable compared to 2002.

The management of institutional funds and of high-performing mutual funds
represents the core activity of the subsidiary HSBC Trinkaus Capital Management.
In the field of special funds, it achieved above-average growth in value of 12.9
per cent compared to a market norm of just 8.2 per cent. Corporate bond funds
were much in demand and, compared to fixed-income funds, demonstrated superior
income for manageable levels of risk. INKA Internationale
Kapitalanlagegesellschaft specialises in fund administration, with a volume of
funds under management of EUR16.3 billion; the company invested in 30 mutual
funds and 170 special funds. INKA enjoys an excellent market position. It was
ranked second at year-end 2003, in terms of the volume of funds administered, in
a survey of Master-KAG investment companies carried out by BVI, the Federal
Association of Investment Companies.

Proprietary Trading has regained the profitability of previous years through a
combination of market-making, product innovation and the management of
proprietary positions. Trading in equities and equities derivatives, in
particular, considerably exceeded expectations despite the very volatile markets
in the first half of the year. Trading in equities derivatives significantly
increased its contribution to profits with numerous new product developments,
and as a result of the expansion of its market position in retail business
through the HSBC Trinkaus Investment Products initiative (www.hsbc-tip.de).

HSBC Trinkaus & Burkhardt has further built up its business in the debt capital
markets. In co-operation with HSBC, the bank took a lead management position in
55 issues with an aggregate value of more than EUR42 billion. The importance of
the bank's own issuance of warrants, certificates and fixed-interest instruments
with various structures was evident in 2003 from the number of such issues it
made, which nearly tripled from 1,571 to 4,645.

The GEOS securities processing system implemented in 2002 enabled HSBC Trinkaus
& Burkhardt to extend its service offering to other banks. In June 2003 the
securities back office processing of S Broker AG was successfully migrated to
GEOS. In the autumn, an outsourcing contract was signed with DAB Bank, which
lays claim to being the largest direct broker in Germany by value of client
funds held, and which processed around 3.2 million transactions in 2003.

The Managing Partners of HSBC Trinkaus & Burkhardt view 2004 with cautious
optimism. The bank's earnings base has been further extended. It seeks to
achieve in 2004 a double-digit percentage increase in operating profits
according to International Financial Reporting Standards. This goal is
considered achievable if stock market recovery allows securities turnover to
increase, and if risk provisioning costs do not exceed last year's level. The
bank will continue to observe the principle of linking dividend distribution to
profits earned.

The Partners also announced their intention to sell to another member of the
HSBC Group the bank's indirect 12.65 per cent shareholding in HSBC Guyerzeller
Bank AG, Zurich, for a consideration of approximately EUR60 million, yielding an
exceptional gain on disposal of approximately EUR18 million. The strategic
direction of HSBC Trinkaus & Burkhardt remains unaffected by this sale.

Consolidated figures according to International Financial Reporting Standards

                                          2003        2002    % change
1. Balance Sheet (EUR m)

Loans and advances to customers        2,364.7     2,465.7       - 4.1
Financial assets held for trading      4,992.2     4,352.7        14.7
Customer accounts                      5,569.5     5,892.7       - 5.5
Financial liabilities held for
  trading                              2,883.3     2,894.4       - 0.4
Equity capital                           753.7       717.9         5.0
Total assets                          10,987.7    11,130.7       - 1.3

2. Profit & Loss Account (EUR m)

Net interest income                       75.0        70.4         6.5
Risk provisions                            7.7         4.1        87.8
Net fees and commissions                 196.4       195.5         0.5
Trading profit                            44.8        15.3           -
Total administrative expenses            226.9       224.5         1.1
Operating profit                          86.1        57.0        51.1
Net income before tax                     84.2        50.1        68.1
Net income after tax                      46.9        26.3        78.3

3. Other Key Figures

Pre-tax return on equity (%)              13.5         8.3           -
Cost:income ratio of ordinary
  activities (%)                          71.2        80.6           -
Assets under management (EUR m)       35,443.9    32,082.6        10.5
Capital ratio per BIS (%)                 11.4        11.5           -






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