HSBC USA Inc-1Qtr Results

HSBC Hldgs PLC
8 May 2000


                        HSBC USA INC.
           2000 FIRST QUARTER RESULTS - HIGHLIGHTS

HSBC USA Inc. merged with Republic New York Corporation on 31
December 1999. The acquisition was accounted for using
purchase accounting rather than pooling of interests, and
Republic's financial results are included only from the date
the transaction was completed. The addition of Republic's
figures, not accounted for in 1999, was the principal reason
for growth in earnings and the increase in the balance sheet.

After the merger, on a combined basis, HSBC Bank USA had
assets of US$79.6 billion and deposits of US$58.5 billion,
making it the third largest depository institution in New
York State. Integration of the businesses, including systems
conversion, is proceeding smoothly and is expected to be
substantially completed by the end of the year.

At 31 December 1999, HSBC Bank USA's expanded customer base
included more than two million personal and 120,000
commercial and institutional customers. As a result of the
Republic merger, HSBC USA is now a world leader in banknotes
and bullion trading and provides the fifth largest factoring
service in the US.

*  Net income in the first quarter of 2000 increased by 31.0
per cent to US$159 million from US$121 million in the first
quarter of 1999.

*  Cash earnings^ for the quarter increased by 65.0 per cent
to US$217 million from US$132 million for the same period
last year.

*  The cost:income ratio, excluding goodwill amortisation was
54.0 per cent compared with 45.5 per cent in the first
quarter of 1999.

*  Tier 1 capital to risk-weighted assets increased to 13.3
per cent from 8.7 per cent at the end of the first quarter of
1999.

*  Cash earnings as a percentage of average common equity was
9.2 per cent compared with 24.7 per cent during the same
period of 1999, reflecting a substantial increase in common
equity as a result of the merger.

*  Off balance sheet funds under management were US$45.5
billion.


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


HSBC USA Inc.                                        Quarterly summary


HSBC USA Inc. recorded a net income of US$159 million for the
quarter ended 31 March 2000, up 31.0 per cent from US$121
million in the first quarter of 1999. Cash earnings, which
are primarily net income after preferred dividends and after
adding back goodwill amortisation of US$64 million (1999:
US$10 million)^, were US$217 million for the quarter, up 65.0
per cent from US$132 million last year.

Youssef Nasr, chief executive officer of HSBC USA Inc., said:
'We are pleased with our first quarter operating and
financial results. This is a merger that is working. Republic 
and HSBC USA are complementing each other well. Customer
retention is strong and we are on target to achieve the
levels of cost savings we announced originally.

'If the combined organisations had been one from the first
quarter of last year and all the acquisition-related
accounting and unusual items were left out, revenues would
have been up modestly and expenses down.

'Deposit levels have remained steady and assets under
management have grown over 4.0 per cent so far this year.
Revenues from wealth management and insurance reached record
highs. Total portfolio holdings for International Private
Banking (New York, Florida and California) increased over 7.0
per cent, compared with 31 December 1999. Our capital ratios
are high compared to our peers, making us one of the soundest
financial institutions in the US.'

Total loans at 31 March 2000 were US$38.6 billion, up 63.1
per cent from US$23.7 billion at 31 March 1999, and compared
with US$37.9 billion at 31 December 1999. Total assets were
US$86.4 billion, compared with US$33.8 billion at 31 March
1999 and US$90.2 billion at 31 December 1999. Total deposits
were US$54.2 billion at 31 March 2000, up 106.0 per cent from
US$26.3 billion at 31 March 1999, and in comparison with
US$56.4 billion at 31 December 1999.

Common equity increased to US$9.5 billion at 31 March 2000,
compared with US$2.2 billion at 31 March 1999. As a percentage of
total assets, common equity increased to 11.0 per cent from
6.4 per cent at 31 March 1999. The ratio of tier 1 capital to risk-
weighted assets was 13.3 per cent compared with 8.7 per cent
last year, and the ratio of total capital to risk-weighted
assets was 15.1 per cent compared with 12.5 per cent.

The return on average common equity for the first quarter of
2000 was 6.5 per cent versus 22.8 per cent in the first 
quarter of last year. The return on average common equity 
was significantly affected by the amortisation of goodwill 
through the income statement and the substantial increase 
in common equity. The ratio of cash earnings to common equity
was 9.2 per cent compared with 24.7 per cent at 31 March 1999.


---------------
^ Goodwill reflects the premium paid over book value and
other valuation adjustments. The US$64 million amortised
through the income statement in the first quarter included
US$20 million amortisation of the share of goodwill of a 49.0
per cent affiliate, HSBC Republic Holdings (Luxembourg),
formerly called Safra Republic Holdings.


HSBC USA Inc. is the New York-based holding company for HSBC
Bank USA; for Republic Bank California, N.A.; and for the
HSBC Group's interest in the Wells Fargo HSBC Trade Bank.
HSBC Bank USA has more than 450 branches in New York, seven
branches in Florida and two in Pennsylvania. HSBC USA Inc. is
an indirectly-held, wholly-owned subsidiary of HSBC Holdings
plc (NYSE:HBC) which is headquartered in London. With over
5,000 offices in 80 countries and territories and assets of
US$569 billion at 31 December 1999, the HSBC Group is one of
the world's largest banking and financial service
organisations.

                                     Quarter ended      Quarter ended  
Figures in US$m                      31 March 2000      31 March 1999  

Net income                                     159                121 

Cash earnings^                                 217                132 

Performance ratios
Cash earnings as % of average
  common equity                                9.2%              24.7%
Cost: income ratio
  (excluding goodwill amortisation)           54.0%              45.5%
Staff numbers
  (full-time equivalents)                   14,233              9,238 

Average balances (US$m)
Loans                                       38,133             23,392 
Earning assets                              73,737             31,437 
Total assets                                84,302             33,745 
Deposits                                    53,683             25,967 
Common equity                                9,461              2,163 

Net yields on total assets
  (tax equivalent basis)                       2.7%               3.7%

Capital (at end of period)
Common equity (US$m)                         9,507              2,168 
As a % of total assets                        11.0%               6.4%

Capital ratios
Leverage ratio                                 9.1%               6.6%
Tier 1 capital to
  risk-weighted assets                        13.3%               8.7%
Total capital to
  risk-weighted assets                        15.1%              12.5%


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


HSBC USA Inc.                         Consolidated statement of income


                                     Quarter ended   Quarter ended
Figures in US$ thousands             31 March 2000   31 March 1999


Interest income
Loans                                      721,021         465,830 
Securities                                 420,967          58,843 
Trading assets                              28,598          11,900 
Other short-term investments               107,288          40,541 
Total interest income                    1,277,874         577,114 

Interest expense
Deposits                                   525,440         200,933 
Short-term borrowings                       98,974          38,637 
Long-term debt                             104,183          26,290 
Total interest expense                     728,597         265,860 

Net interest income                        549,277         311,254 
Provision for credit losses                 27,993          22,500 
Net interest income, after provision for
  credit losses                            521,284         288,754 

Other operating income
Trust income                                20,143          12,658 
Service charges                             43,508          29,194 
Mortgage banking revenue                     7,482          11,216 
Other fees and commissions                  79,443          39,962 
Trading revenues                            52,227           2,592 
Security gains (losses)                     (3,280)          2,451 
Earnings from equity investments:
Share of earnings                           32,818             659 
  Less: amortisation of share of
        affiliates goodwill                (20,100)              - 
                                            12,718             659 
Other income                                10,406          22,869 
Total other operating income               222,647         121,601 

Total income from operations               743,931         410,355 

Other operating expenses
Salaries and employee benefits             250,891         104,500 
Occupancy expense, net                      42,100          22,752 
Other expenses                             138,157          69,679 
Operating expenses before goodwill
  amortisation                             431,148         196,931 
Goodwill amortisation                       43,731           9,582 
Total operating expenses                   474,879         206,513 
Income before taxes                        269,052         203,842 
Income tax expense                         110,000          82,400 
Net income                                 159,052         121,442 

Preferred dividends                          6,885               - 

Net income available to common
  shareholder                              152,167         121,442 


HSBC USA Inc.                               Consolidated balance sheet


Figures in US$ thousands             At 31MAR00  At 31DEC99  At 31MAR99 

Assets
Cash and due from banks               1,827,278   1,977,756     916,342 
Interest bearing deposits with banks  4,805,577   4,234,668   2,648,269 
Federal funds sold and securities
purchased
  under resale agreements             4,197,256   2,318,361     736,181 
Trading assets                        4,355,631   4,526,988     802,364 
Securities available for sale        19,017,311  25,973,805   3,904,554 
Securities held to maturity           4,770,515   4,811,695           - 

Loans                                38,577,856  37,909,143  23,654,683 
Less - allowance for credit losses      659,560     659,603     386,331 
Loans, net                           37,918,296  37,249,540  23,268,352 

Premises and equipment                  750,691     745,910     205,704 
Accrued interest receivable             789,350     778,363     218,139 
Equity investments ^                  2,546,009   2,540,927      25,920 
Goodwill and other acquisition        3,262,362   3,307,147     342,677 
intangibles
Other assets                          2,199,795   1,774,459     704,771 

Total assets                         86,440,071  90,239,619  33,773,273 

Liabilities
Deposits in domestic offices
- Non-interest bearing                6,428,516   6,003,813   2,986,575 
- Interest bearing                   29,458,990  29,393,957  19,098,274 
Deposits in foreign offices
- Non-interest bearing                  267,747     187,099           - 
- Interest bearing                   18,052,196  20,865,022   4,231,402 
Total deposits                       54,207,449  56,449,891  26,316,251 
Trading account liabilities           2,698,190   2,440,729      71,648 
Short-term borrowings                10,205,206   5,271,597   2,540,065 
Interest, taxes and other             3,434,362   3,059,993     830,466 
liabilities
Payable to shareholders of acquired           -   7,091,209           - 
company
Subordinated long-term debt           3,426,094   3,427,649     822,409 
Guaranteed mandatorily redeemable       710,628     710,259     400,000 
securities
Other long-term debt                  1,750,789   1,747,131     624,844 
Total liabilities                    76,432,718  80,198,458  31,605,683 

Shareholders' equity
Preferred stock                         500,000     500,000           - 
Common shareholder's equity
- Common stock                                4           4           5 
- Capital surplus                     8,921,427   8,920,113   1,807,259 
- Retained earnings                     623,745     671,578     343,621 
- Accumulated other comprehensive
    (loss) income                       (37,823)    (50,534)     16,705 
Total common shareholder's equity     9,507,353   9,541,161   2,167,590 
Total shareholders' equity           10,007,353  10,041,161   2,167,590 

Total liabilities and shareholders'
  equity                             86,440,071  90,239,619  33,773,273 


^  Principally 49 per cent ownership interest in HSBC
Republic Holdings (Luxembourg) formerly called Safra Republic
Holdings, including goodwill of US$1.6 billion.