HSBC Sells Australian Online Stockbroking Business To E*TRADE

Hamilton, Bermuda: 5 June 2006 - HSBC (HSBC.BH) has entered into an agreement to sell its Australian online stockbroking business, HSBC Stockbroking (Australia) Pty Limited, to ETRADE Australia Limited (ASX: ETR, www.etrade.com.au) for a consideration of approximately A$51 million (approximately US$38.5 million).

HSBC Stockbroking is a non-advisory, online trading and settlement services business, covering equities, warrants and options, and also provides online managed funds and international share trading in 14 overseas markets.

E*TRADE, the second largest online broker in Australia, provides an award winning online trading service to retail investors including equities, options and CFDs (contracts for difference). The company also provides trade execution and settlement services to intermediary and institutional clients.

Stuart Davis, Chief Executive Officer of HSBC Bank in Australia, said: "We recently conducted a strategic review of our Australian stockbroking business. We firmly believe that the online broking industry will continue to consolidate and that the investment in technology required to remain competitive is likely to increase significantly."

"While we have steadily increased our customer base over time, E*TRADE's interest in acquiring the business and entering into an ongoing strategic alliance presented us with an attractive offer. Their level of commitment ensures our 40,000 customers will continue to have access to a first class broking service."

"Our strategy for growth in Australia places a strong emphasis on making full use of the HSBC Group's strengths and participating in market opportunities where we have a strong comparative advantage. For our retail banking customers, this includes our new consumer finance initiative and, for our corporate customers, initiatives in areas such as project finance, trade finance, debt capital markets and payments and cash management."

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