HSBC Holdings plc Investor Day 2003

Corporate, Investment Banking & Markets

Forward-looking statementsThis presentation and subsequent discussion

may contain certain forward-looking statementswith respect to the financial condition, results of

operations and business of the Group. Theseforward-looking statements represent the

Group’s expectations or beliefs concerningfuture events and involve known and unknownrisks and uncertainty that could cause actual

results, performance or events to differmaterially from those expressed or implied in

such statements. Additional detailedinformation concerning important factors that

could cause actual results to differ materially isavailable in our Annual Report.

Forward-looking statementsThis presentation and subsequent discussion

may contain certain forward-looking statementswith respect to the financial condition, results of

operations and business of the Group. Theseforward-looking statements represent the

Group’s expectations or beliefs concerningfuture events and involve known and unknownrisks and uncertainty that could cause actual

results, performance or events to differmaterially from those expressed or implied in

such statements. Additional detailedinformation concerning important factors that

could cause actual results to differ materially isavailable in our Annual Report.

Investor Day - 27 November 2003

3

Corporate, Investment Banking and Marketsgenerates over 30% of Group profits

Total Group pre-tax profits 1H2003

Corporate, InvestmentBanking & Markets

(US$2,237m)

Private Banking(US$268m)

Commercial Banking(US$1,647m)

Consumer Finance(US$649m)

Personal FinancialServices

(US$2,082m)

4%

33%

24%9%

30%


4

➣ Joined HSBC June 2003➣ Morgan Stanley – 23 years➣ Leader in M&A and client

relationship management➣ Excellent CEO client

relationships in Europeand Americas

➣ Built up Morgan Stanley’sInvestment BankingDivision in Europe from1984 to 1996 to top 3position

We have a strong management team ...

CIBMCo-Heads

Stuart T. Gulliver John J. Studzinski

➣ HSBC – 23 years➣ Experienced Global

Treasury & CapitalMarkets business leader

➣ Built up HSBC AsianTreasury operations tonumber one position

➣ Excellent reputation inMarkets riskmanagement


5

… and a management structure that recognises boththe primary and secondary markets ...

SectorManagement

CIBMCo-Heads – Stuart Gulliver and John Studzinski

Corporate andInvestment Banking Global Markets

TransactionBanking

InvestmentBanking

Credit andRelationship

LendingForeign

ExchangeSecondary

FixedIncome

EquitiesBalance

Sheet andLiquidity

Management

Derivatives

Research*

Debt andEquity

Originationand

Financing

* Managed joint by John Studzinski and Stuart Gulliver


6

… but our coverage model emphasises ourrelationship approach to client servicing

➣ Understanding totality ofclient requirements

Client

Relationship Management

Credit andLending

InvestmentBanking

TransactionBanking

GlobalMarkets

Greater Chinaand Asia Americas Europe and

Middle East

EmergingEurope and

Africa

BankingServices

Advisory andFinancing

RiskManagement

InvestorServices

➣ Sector based approach

➣ A full range of value addedsolutions

➣ Global / local delivery

Financing Research


7

Our management structure is still relatively new butevolving ...

➣ Integration of Corporate & Institutional Banking (CIB) and InvestmentBanking & Markets (IB&M) only one year ago

➣ Formation of Global Markets in November 2002

➣ Consolidation of Transaction Banking under Iain Stewart in April 2003

➣ Appointment of co-heads (Gulliver / Studzinski) in May 2003, Globalbusiness management introduced June 2003


8

… but we have a clear set of strategic objectives ...

➣ Build a seamless business focused on Group clients

➣ Ensure a client facing organisation, unifying and strengtheningrelationship management and origination

➣ Provide comprehensive coverage of our client base

➣ Deliver group expertise in selected global product areas

➣ Ensure credit quality, risk management tools and portfolio managementare at the heart of our business

➣ Provide a facilitating organisation structure


9

… and embedded principles

➣ Understanding and supporting our clients long-term financial andcommercial aspirations

• Conducting a two way global client relationship and dialogue based on integrity,trust and partnership

• Acting as a trusted industry advisor and market expert to support our clients inthe development of their business

• Providing global markets acumen, risk management and advice and marketliquidity to corporate and institutional clients worldwide

➣ Creating long term shareholder value for clients and HSBC alike


10

Our businesses are at different stages ofdevelopment

LoMarket ShareLo High

Rec

ogni

tion/

Prof

itabi

lity

Global Markets

High

MarketsEurope

MarketsAmerica

MarketsAsia Pacific


11



Rec

ogni

tion/

Prof

itabi

lity

High

Debt FinancingAsia Pacific

Debt FinancingAmericas

Debt FinancingEurope

Global Markets Debt Financing


12



Rec

ogni

tion/

Prof

itabi

lity

High

Global Markets Debt Financing Transaction Banking

TransactionBankingAmericas

TransactionBankingEurope

TransactionBanking Asia

Pacific


13



Rec

ogni

tion/

Prof

itabi

lity

Global Markets Transaction Banking

High

Debt Financing Credit and Lending

Credit &Lending

Asia Pacific

Credit &LendingEurope

Credit &Lending

Americas


14



Rec

ogni

tion/

Prof

itabi

lity

High

Credit and LendingGlobal Markets Transaction BankingDebt Financing Investment Banking

InvestmentBankingAmericas

InvestmentBankingEurope

InvestmentBankingAsia Pacific


15

… but our business goals are clear ...

CIBM Goals➣ Top Relationship Banker to largest

companies globally➣ Recognised Industry and Sector

Experts➣ Leading player in Global MarketsTransaction Banking

➣ Global Leader in Trade,Payments and CashManagement and SecuritiesServices

Credit and Lending

➣ Top 5 Banker to largestcompanies globally

➣ Optimised use of balance sheet➣ Minimised credit losses

Financing

➣ # 1 DCM Asia➣ Top 2 Syndicated Finance Asia➣ Top 3 Syndicated Finance Europe➣ Top 5 International DCM➣ Top 12 Equity linked Capital Markets

➣ Recognised Leader inprovision of sector-basedresearch

Research

Global Markets➣ Top 3 FX globally➣ Top 5 Derivatives globally➣ Top 5 Secondary debt➣ # 1 Precious Metals

➣ Asia: Top 3-5 M&A➣ Europe: Top 5-7 M&A➣ Americas: Top 7-10 M&A

Investment Banking


16

… and our business has strong momentumEuro Market Bonds

-2

0

2

4

6

2003 Market share

Cha

nge

in M

arke

t sha

re 0

1-03

BofA

CitiDeutsche

Morgan Stanley

JPMMerrill

CSFB

Barc Cap

UBS

HSBC

Goldmans

ABN

BNP

SocGen

+

-

Source: Bloomberg


17

… and our business has strong momentum

-7

-5

-3

-1

1

3

5

7

2003 Market share

Cha

nge

in M

arke

t sha

re01

-03

Asia Market Bonds

BofA

HSBC

UBS

Merrill

Citi

JPM

DeutscheMorgan Stanley

Goldmans

Barc CapCSFB

ABN

+

-

Source: Bloomberg


18


-3

-1

1

3

2003 Market share

Cha

nge

in M

arke

t sha

re01

-03

International Bonds

BofACiti

Deutsche

Morgan Stanley

JPM

Merrill

CSFB

Barc Cap

UBS

HSBC

Goldmans

ABNBNP

SocGen

+

-

Source: Bloomberg


19


-6

-4

-2

0

2

4

6

2003 Market share

Cha

nge

in M

arke

t sha

re01

-03

Global M&A

Deutsche

Morgan StanleyJPM

Merrill

CSFB

UBS

HSBC

Goldmans

Citi

+

-

Source: Thompson Financial


20

Specific plans are in place to achieve our objectives

Global ClientRelationshipManagement

➣ Implement sector segmentation

➣ Develop CIBM sector head role with defined accountability

➣ Strengthen business with high-level recruitment in key areas

➣ Produce annual plans for top clients and introduce quarterly pipeline reviews

➣ Strengthen training for relationship managers to ensure effectiveness with clients

Business Area


21


GlobalTransactionBanking

Business Area


➣ Position Transaction Banking as a single business line

➣ Strengthen the relationship management function and actively target financial institutions

➣ Increase cross-border sales within the Commercial Banking (Middle Market) segment

➣ Enhance delivery channels


22



GlobalInvestmentBanking

Business Area


➣ Develop global focused advisory business and establish core M&A and advisory group in US

➣ Review professional staff talent and fill key sector gaps with selective industry hires

➣ Develop competitive and retention oriented incentive schemes


23




Global Credit &Lending

Business Area


➣ Manage HSBC balance sheet in terms of a global service proposition

➣ Match quarterly pipeline reviews to interim and long term client plans

➣ Review professional staff talent


24





GlobalFinancing

Business Area


➣ Develop Convertibles, Term Asset-Backed Securities and Mortgage-Backed Securitiescapabilities

➣ Strengthen US proposition


25





GlobalFinancing

Business Area


Global Markets

➣ Strengthen global Currency Option capabilities➣ Develop Convertibles & Equity Derivatives product in Europe & Asia initially➣ Introduce Mortgage Backed Securities capabilities in US➣ Strengthen Corporate & Institutional Sales across all key geographies


26

We are rebuilding our Equities business, reshapingour existing operations to develop a client-led modelfor the new activity

Sector/ClientSelection

Market Makingand Execution Research

Retail andPrivate Banking Corporates Trading

ClientsClassical

Institutions


27

North America is a top market priority

➣ Strengthening Relationship Management with appointment of key sectorheads

➣ Strengthen US Debt Capital Markets platform

➣ Develop key product capabilities• Term Asset-Backed Securities• Mortgage-Backed Securities

➣ Establish core M&A and Advisory group


28

Achievement of our objectives is not without risk –but we are well positioned to succeed

Risk Risk Mitigation

➣ Failure to attract key industry product andregional hires

➣ A number of key hires already securedenhancing our position to attract newrecruits

➣ Short term profits squeeze as we invest forgrowth

➣ Clear timeframe and accountability forinvestment

➣ Loss of core staff to industry or competitors ➣ Strong HR emphasis to create diverse,motivated workforce

➣ Reinforced with competitive and retention-oriented compensation


29

HSBC is committed to a relationship driven, client facingCorporate and Investment Bank. Our core values are

integrity and trust. We understand our clients’aspirations and strategic objectives globally and

locally and create long-term value for clients and ourshareholders alike – so that when our clients do well,

we do well.

Documents

HSBC Holdings plc Investor Day 2003