1. Managing for growth
Taking HSBC to the next level
Prepared for
Michael Geoghegan
Group Chief Executive Officer
Merrill Lynch Conference – London – October 2006

2. 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.

3. Story so far… does it tell all?

4. Total shareholder return
HSBC TSR – 15 years, 25% CAGR HSBC TSR – two years, 13% CAGR
3,000 140
2,500
130
2,000
120
1,500
110
1,000
100
500
90
0
Jul-04 Nov-04 Apr-05 Aug-05 Jan-06 Jun-06
Jun-91 Jun-94 Jun-97 Jun-00 Jun-03 Jun-06

5. HSBC – record of growth
Dividends per share/earnings per share
(US cents) Asian crisis Argentinean crisis
15%
S+
140 EP
120
GR
CA
100
25%
S+
EP
80
DPS1
60
16% CAGR
40 1995-2005
20
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
UK GAAP (excl goodwill amortisation) IFRS
DPS EPS
(1) DPS are in respect of periods shown above

6. HSBC half year results
US$m H105 H106 % change
Net operating income before loan impairment
28,029 32,185 +15
charges
+14
Net operating income 24,752 28,295
Total operating expenses (14,420) (16,139) +12
Profit before tax 10,640 12,517 +18
Profit attributable to shareholders 7,596 8,729 +15
Earnings per share (US$) 0.69 0.78 +13
Dividends per share (US$), first and second interim
0.28 0.30 +7
dividends
Tier 1 ratio (%) 8.7 9.4

7. Has HSBC got too much capital and should it be
returned to shareholders?

8. Improving capital efficiency
(US$bn) (%)
24% annualised return from
additional US$9bn of capital
110 20
US$102bn
100 US$97bn
15
US$93bn
90
10
80
70 5
H104 H204 H105 H205 H106
Average invested capital employed (US$bn) Return on invested capital (%)
Tier 1 ratio (%)

9. Major acquisitions in last 5 years – a record of success
Acquisition cost Pre-tax profit, 1H06
2001 Demir Bank1 (Turkey) US$425m US$120m
2002 Bital2 (Mexico) US$2.3bn US$515m
2003 Household3 US$2.8bn4
US$16.4bn
2004 Bank of Bermuda US$1.2bn n/a
And strategic stakes in China:
2002/5 Ping An 19.9% Substantial increase in value of
stakes (US$4.0bn to US$10.9bn)
2004/5 Bank of Communications 19.9% Leading foreign bank in China
(1) Demir Bank and Benkar
(2) Bital, Seguros and Afore Allianz Dresdner
(3) Household and Metris
(4) HSBC Finance Corp, IFRS Management Basis, Form 8-K

10. Has HSBC become too big to manage?

11. Our global distribution
Our global advantage
HSBC Group international network
• In 76 countries and territories
• With 9,500 offices
Managua
Bogotá
San
Salvador
Tegucigalpa
San Jose
Key
To be added with Grupo Banistmo S.A.

12. Strength of operating franchise by geography
Profit before tax
1H05 1H06 3%
3%
27% Europe 29%
34%
35% Hong Kong
Rest of Asia Pacific
North America
23% 21%
South America 13%
12%
US$10.6bn US$12.5bn
Growth in profit, 1H06 vs 1H05
Europe +25
Hong Kong +10
Rest of Asia-Pacific +29
North America +15
South America -2
(%)
Group +18
(5) 0 5 10 15 20 25 30

13. Strength of operating franchise by customer group
Pre-tax profits
1H05 1H06
5%
4% 3%
Personal Financial Services
23%
22% Corporate, Investment Banking and Markets
47%
49% Commercial Banking
Private Banking
25%
22% Other
US$10.6bn US$12.5bn
Growth in profit, 1H06 vs 1H05
Personal Financial Services +13
Corporate, Investment Banking and Markets +37
Commercial Banking +21
Private Banking +33
Group +18
(%)
0 5 10 15 20 25 30 35 40

14. Why invest in HSBC rather than good regional
players?

15. Our businesses – building for sustained growth
0
Harvest Grow
Singapore
Bermuda
20 Mexico
Cost efficiency ratio
Malaysia
Hong
Argentina
Kong UAE
40 US
Malta
50.1%
India
Brazil
Turkey
60 UK
France Mainland China
Germany
80
Canada Europe Private
Banking
Re-engineer Invest
14.8%
100
(40) (20) 0 20 40 60 80
Revenue growth
Prioritisation of Investment

16. What are the next things to look for from HSBC?

17. The Brand

18. Shift spend to global innovation and service
2005 actual (US$4,413m) 2006 plan (US$4,810m) 2007 plan (US$4,990m)
2% 1% 1%
8% 11% 12%
4%
5%
7%
48%
50%
52%
34%
33%
32%
Group Systems - Gold Group Systems Regional Implementation
Regional Development IT Operations
Other

19. Our people, our culture – the best place to work

20. Insurance and retirement business
The opportunity
People aged 60 years and over: 1950–2050 (millions)
2,000
1,500
1,000
500
0
2050
1950 1980 2000 2025
Source: United Nations World Population Prospects, 2004 Revision

21. What are the potential challenges?

22. (1)
HSBC exposure to US residential lending
(1)
US residential mortgages (US$bn)
130 126
125
118
120
112
115
110
105
100
1H05 2H05 1H06
US consumer finance (1H06)
18%
27%
US$16bn US$24bn
First lien Fixed rate
Second lien
US$73bn ARMs
US$65bn
73%
82%
US$89bn US$89bn
(1) 1st mortgage and 2nd lien lending

23. HSBC exposure to UK consumer
HSBC Group Personal Lending
(US$448bn)
26%
UK
Rest of
UK Personal Lending
Group
(US$118bn)
74%
36%
Residential mortgages
Other personal
unsecured
64%

24. Our main focus
Joining up the company for our customers
Businesses
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Brand

25. Who is Michael Geoghegan?
Now you know