HSBC HOLDINGS PLC

Delivering while de-leveringDOUGLAS FLINTCHIEF FINANCE DIRECTOR

13 MAY 2008:

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Forward-looking statements

This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group.

These forward-looking statements represent the Group’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

Additional detailed information concerning important factors that could cause actual results to differ materially is available in our Annual Report.

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The challenge for banks in 2008

•Restore trust and transparency

•Redefine business model and prove sustainable returns

•Address volatility in capital requirements and profits

• Engage to avoid disproportionate regulatory / political response

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Results by geography and customer groupProfit before tax: US$24.2bn

Customer group % share % change 2007 vs 2006

+24

-38

+5+19

-50 -20 10 40 70

n/a

24%

25%

6%

30%

15% Personal Financial Services Commercial Banking Global Banking and Markets Private BankingOther

Geography % share % change 2007 vs 2006

-98+23

+57

+26+26

-130 -100 -70 -40 -10 20 50 80

50%

5%9%

36%Asia Pacific (50%)Middle East (5%)Latin America (9%)Europe (36%)North America (0%)

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0.490.61

0.69

0.540.66

0.80

0.630.76

0.99

1.18

1.36 1.40

1.65

0.350.41

0.31

0.900.81

0.730.660.60

0.530.480.440.340.310.280.22

0.10 0.12 0.14 0.16

0.00

0.50

1.00

1.50

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Earnings Per Share Dividends Per Share

Where we have come fromFinancial performance over 15 years

(1) UK gaap to 2003, IFRS basis from 2004(2) Dividends per share in respect of each year

US$

Asian crisis

Argentine crisis

Sub-primecrisis

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Signature capital strength: Tier 1 capital ratios (%)

8.4%8.3%7.9%7.6%

0.9%1.1%1.1%1.3%

9.3%8.9% 9.0% 9.4%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2004 2005 2006 2007

Shareholders' equity, minority interest and preference shares less deductions Innovative Tier 1 capital

Basel 2Tier 1:9.0%

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Capital allocated focussedBusiness models which define our ‘right to win’

Products where global scaleis critical to effectiveness: efficiency, expertise and brand

3 Global Product Platforms(eg Cards, HSBC Direct)

Businesses with international customerswhere Emerging Markets connectivity is critical

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Businesses with local customers where efficiency can be achieved through global scale

2 Mass Market(PFS)

Small & Medium Sized Businesses

(CMB)

Personal Financial Services125 millioncustomers

Commercial Banking

2.8 millioncustomers

Private Banking95,944 customers

Global Banking andMarkets

4,193 customersCIB

Mass Affluent

(PFS)Corporates

HNWI

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Inter-connectivity is increasing… being at both ends matters

Developed | Developed

Emerging | Emerging

Developed | EmergingEmerging | Developed

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Backdrop to 2008

• De-leveraging of the financial system •Conservative balance sheet with strong capital base

•Emphasis on Emerging Markets gives us a better position compared to many of our competitors

• Emerging markets; increasingly strong long term drivers for growth

HSBCThe World

•We are underway in reconfiguring our US business to dovetail fully with our Group strategy

• US economy likely to get worse before it gets better

•Strong asset-liability position and conservative advance-deposit ratio• Continuing illiquidity in financial services

•Leadership in servicing trade based on unique international connectivity

• World economic growth and continued trends in globalisation and trade flows

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Delivering in a de-leveraging world

Using capital and liquidity strength to

build long term shareholder value

Targeting efficiency and high value segments in

developed markets

Continue to build out organically and selectively

through acquisition in emerging markets

Reinforcing our global linkages and sustained

customer relationship model as others retreat to core

Recapturing value from a restructured / refocused US consumer finance business

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Building on HSBC’s heritageOur strategy is focused on delivering superior growth and earnings over time

Our strategy: shaping our business to deliver

Align presence with global trends

Invest primarily in developing markets

Focus developed markets businesses

on international connectivity

Maintain financial strength

Our execution: joining up to create value

Leverage brand and network to

increase revenues

Use scale to maximise efficiency

Align objectives and incentives to ensure

our people are engaged

►

Our heritage

Asian trade origins

Deep roots in many geographies

International management culture

Financial strength

►

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Financial targets: range

Return on total shareholders’equity (through the cycle)

15-19%

Cost efficiency ratio

48-52%

Tier 1 capital(Basel 2)

7.5-9.0%

Total shareholder return

Above peer group average

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HSBC GroupWe are the world’s local bank

Largest international emerging markets bank

Widespread international network

Uniquely international customer base

Signature financial strength