Press Release

Knight Vinke looks forward to HSBC's strategy presentation. Knight Vinke also notes that the resolution governing HSBC's share plan is legally void

New York, NY, 22 November 2007.

Knight Vinke welcomes HSBC's investor strategy day and looks forward to hearing how management will address the six key issues which it has been highlighting in the last two months. These issues are:

1. Perennial stock market underperformance compared to peers
   
2. Pursuit of geographic diversification instead of comparative advantage
   
3. Lack of scale in key markets ­ UK, USA and France
   
4. Good position in Hong Kong, but franchise at risk due to lack of credible China strategy
5. Lack of credible CIBM strategy ­ trading assets now tie up a third of the group balance sheet
6. Strategy unchallenged due to poor Board structure and lack of economic incentives for senior management to do so.

A Brief Explanation of Corporate Governance Issues (see point 6)
Concerning the HSBC 2005 Share Plan ("the Plan")

• Under the Plan, HSBC's most senior executives receive HSBC shares as part of their remuneration each year, but these shares are not immediately released. The shares are released if the Company achieves agreed performance targets (measured over the three year period following the award) and are lost if the performance targets are not met.
• A resolution to adopt the Plan was put to shareholders at the AGM in May 2005. Performance targets were summarised in the Chairman's Letter dated 31 March 2005 and other documents sent to shareholders in seeking approval for the Plan. They were also summarised in the 2004 Annual Report.

All of these documents gave the impression that the performance targets were significantly more demanding than they are in reality.

• The full details of how the scheme works only became available to most shareholders long after the shareholders had approved the Plan ­ i.e., on publication of the 2005 and 2006 Annual Reports containing details of the performance targets and how they are calculated.
• As a consequence, HSBC's most senior executives stand to receive substantial performance-related pay in March 2008, despite more than $20 billion of provisions for credit and trading related losses over the past two years.

We believe the Notice given to shareholders describing the Plan was both misleading and insuficient. As a result, the resolution approving the Plan is legally void and the Plan will have to be resubmitted to shareholders for approval at the next AGM.

Eric Knight, Chief Executive Oficer of Knight Vinke, commented:

"It is astonishing that HSBC has inaccurately described something as fundamental as the way its most senior executives are remunerated in seeking shareholder approval.

This also illustrates that HSBC's Board of Directors may not be suficiently independent.

In our view, HSBC's inadequate corporate governance, which in several key areas falls short of the requirements of the Combined Code, is at the heart of the reason behind HSBC's long term underperformance. While each failure may be considered to be insignificant when considered on its own, when taken as a whole, the failures ought to give all shareholders and the general public cause for concern."

About Knight Vinke Asset Management
Knight Vinke Asset Management is an institutional fund manager which specialises in the linkage between value creation and better governance in large cap public companies. Its clients include some of the world's largest public pension funds and institutional investors. Knight Vinke is an institutional shareholder of HSBC. This announcement is not intended, and shall not be construed, as an oer, solicitation, invitation or inducement to buy or sell securities or interests therein or other investments.

For further information, please contact:
Martin Forrest, Director of Communications David Trenchard/John Sunnucks
Knight Vinke Asset Management

Tulchan Communications
T: +377 93 30 06 36 T: +44 20 7353 4200
forrest@kvamllc.com
knightvinke@tulchangroup.com

Knight Vinke Asset Management LLC - Press Release ­ November 23, 2007