Saudi British 2007 Results

HSBC Holdings PLC
15 January 2008



The following news release was issued today by The Saudi British Bank (SABB), a
40 per cent indirectly held associate of HSBC Holdings plc.

                             THE SAUDI BRITISH BANK
                        2007 ANNUAL RESULTS - HIGHLIGHTS

• Net profit of SAR2, 607 million (US$695 million) for the year ended 31
  December 2007 - down SAR433 million (US$116 million), or 14.2 per cent,
  compared with SAR3, 040 million (US$811 million) in 2006.

• Net profit of SAR705 million (US$188 million) for the three months ended 
  31 December 2007 - up SAR120 million (US$32 million), or 20.5 per cent, 
  compared with SAR585 million (US$156 million) for the same period in 2006.

• Earnings per share of SAR6.95 (US$1.85) for the year ended 31 December 2007 - 
  down 14.2 per cent from SAR8.11 (US$2.16) in 2006.

• Operating income of SAR4,374 million (US$1,166 million) for the year ended 
  31 December 2007 - down SAR243 million (US$65 million), or 5.3 per cent, 
  compared with SAR4,617 million (US$1,231 million) in 2006.

• Customer deposits of SAR71.8 billion (US$19.1 billion) at 31 December 2007 - 
  up SAR12.5 billion (US$3.3 billion), or 21.1 per cent, compared with 
  SAR59.3 billion (US$15.8 billion) at 31 December 2006.

• Loans and advances to customers of SAR62.0 billion (US$16.5 billion) at 
  31 December 2007 - up SAR19.5 billion (US$5.2 billion), or 45.9 per cent, 
  from SAR42.5 billion (US$11.3 billion) at 31 December 2006.

• The bank's investment portfolio totalled SAR14.9 billion (US$4.0 billion) at 
  31 December 2007 compared with SAR21.7 billion (US$5.8 billion) at 31 December 
  2006.

• Total assets of SAR98.2 billion (US$26.2 billion) at 31 December 2007 - 
  up SAR21.0 billion (US$5.6 billion), or 27.2 per cent, over 31 December 2006.
                                                                            
Commentary

SABB recorded a net profit of SAR2,607 million (US$695 million) for the year 
ended 31 December 2007. This represents a 14.2 per cent decline compared with 
2006. However, net profit for the three months ended 31 December 2007 increased 
by 20.5 per cent compared with the same period in 2006.

John Coverdale, Managing Director of SABB, said: "SABB has had a strong final 
three months of 2007 and has now delivered profit growth in the last four
successive quarters. This robust performance reflects the strength of our core 
business model, the exceptional quality of our balance sheet and the close 
relationships that we maintain with our clients. Our strategy ensures that SABB 
is not excessively exposed to fluctuating economic cycles and maintains the 
flexibility to respond to evolving customer needs while sustaining superior 
returns to our shareholders.

"The SAR19.5 billion (US$5.2 billion) increase in loans and advances compared to 
31 December 2006 is particularly encouraging and reflects the continuing
strength of the corporate market together with good retail product growth. This 
loan growth has been supported by a SAR12.5 billion (US$3.3 billion) increase in 
customer deposits and the utilisation of SAR6.8 billion (US$1.8 billion) of funds 
from maturing investments generating an additional SAR475 million (US$127 million) 
of special commission income compared to 2006. Excluding the lower contribution 
from the brokerage and mutual funds businesses, core banking non-funds income has 
grown by SAR180 million (US$48 million), or 22.0 per cent, compared to 2006.

"Cost growth has been restricted to 1.8 per cent over the prior year which 
experienced accelerated investment in rebranding, recruitment and systems
enhancements. Bad debt levels are in line with asset growth and increased card 
and consumer finance market penetration. General credit quality is sound,
especially within the corporate sector which continues to benefit from the strong 
underlying Saudi economy. The bank's capital and liquidity positions remain strong.

"SABB has made significant progress during 2007 towards its goal of becoming a 
comprehensive provider of financial services within Saudi Arabia. Products 
developed by our insurance company, SABB Takaful, which began trading on 1 July 
2007, have been very well received by our clients and successfully complement 
our traditional bank offerings. Our joint venture investment bank, HSBC Saudi 
Arabia Limited, is also an important contributor to SABB's results and demonstrates 
the mutual benefits obtained by joining up with HSBC and gaining access to its 
global expertise in providing complete financial solutions for our customers.

"We thank our customers for their continued support, and our staff for their 
commitment and contribution to the bank's success."





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