FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Report of Foreign Private Issuer

Pursuant to Rule 13a - 16 or 15d - 16 of

the Securities Exchange Act of 1934

 

For the month of August

HSBC Holdings plc

42^nd Floor, 8 Canada Square, London E14 5HQ, England

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F).

Form 20-F   X              Form 40-F ......

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).

Yes.......          No    X

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ..............).

 

 

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(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2009
	OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                            to

Delaware	86-1052062
(State of  Incorporation ) 26525 North Riverwoods Boulevard ,	(I.R.S. Employer Identification No.) 60045
Mettawa ,  Illinois (Address of principal executive offices)	(Zip Code)

Part   I.  FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statement of Loss
	Consolidated Balance Sheet
	Consolidated Statement of Changes in Shareholders' Equity
	Consolidated Statement of Cash Flows
	Notes to Consolidated Financial Statements
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Forward-Looking Statements
	Executive Overview
	Basis of Reporting
	Receivables Review
	Real Estate Owned
	Results of Operations
	Segment Results - IFRS Management Basis
	Credit Quality
	Liquidity and Capital Resources
	Fair Value
	Risk Management
	Reconciliations to  U.S.  GAAP Financial Measures
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
Item 4.	Controls and Procedures
Part II  OTHER INFORMATION
Item 1.	Legal Proceedings
Item 6.	Exhibits
Signature

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Finance and other interest income	$ 2,594	$ 3,890	$ 5,440	$ 7,999
Interest expense on debt held by:
HSBC affiliates	60	111	154	250
Non-affiliates	1,002	1,468	2,075	3,102
Net interest income	1,532	2,311	3,211	4,647
Provision for credit losses	2,436	3,189	5,381	6,017
Net interest income (loss) after provision for credit losses	(904 )	(878 )	(2,170 )	(1,370 )
Other revenues:
Insurance revenue	85	108	178	213
Investment income	25	20	32	45
Derivative income	208	27	246	31
Gain (loss) on debt designated at fair value and related derivatives	(4,769)	(864)	(657)	313
Fee income	151	434	379	892
Enhancement services revenue	124	173	259	357
Taxpayer financial services income	3	6	93	155
Gain on bulk receivable sales to HSBC affiliates	-	-	57	-
Gain on receivable sales to HSBC affiliates	90	67	218	122
Servicing and other fees from HSBC affiliates	194	120	387	251
Lower of cost or fair value adjustment on receivables held for sale	(173)	(194)	(343)	(201)
Other income	18	41	64	77
Total other revenues	(4,044 )	(62 )	913	2,255
Operating expenses:
Salaries and employee benefits	270	433	685	875
Sales incentives	-	16	5	36
Occupancy and equipment expenses	22	56	113	110
Other marketing expenses	27	87	77	215
Real estate owned expenses	41	64	146	190
Other servicing and administrative expenses	181	307	436	563
Support services from HSBC affiliates	257	253	536	522
Amortization of intangibles	39	42	81	97
Policyholders' benefits	48	51	103	103
Goodwill and other intangible asset impairment charges	1,641	-	2,308	-
Total costs and expenses	2,526	1,309	4,490	2,711
Loss from continuing operations before income tax benefit	(7,474)	(2,249)	(5,747)	(1,826)
Income tax benefit	1,515	801	660	616
Loss from continuing operations	(5,959)	(1,448)	(5,087)	(1,210)
Discontinued Operations (Note 2):
Income from discontinued operations before income tax expense	-	13	-	43
Income tax expense	-	10	-	23
Income from discontinued operations	-	3	-	20
Net loss	$ (5,959 )	$ (1,445 )	$ (5,087 )	$ (1,190 )

	June 30, 2009	December 31, 2008
	(in millions, except
	share data)
Assets
Cash	$ 391	$ 255
Interest bearing deposits with banks	33	25
Securities purchased under agreements to resell	2,611	1,025
Securities available for sale	3,021	3,094
Receivables, net	87,467	98,021
Receivables held for sale	1,100	16,680
Intangible assets, net	827	922
Goodwill	-	2,294
Properties and equipment, net	181	201
Real estate owned	629	885
Derivative financial assets	1	8
Deferred income taxes, net	2,892	3,318
Other assets	3,365	4,102
Total assets	$ 102,518	$ 130,830
Liabilities
Debt:
Due to affiliates	$ 11,036	$ 13,543
Commercial paper	5,778	9,639
Long term debt (including $25.9 billion at June 30, 2009 and $28.3 billion at December 31, 2008 carried at fair value)	72,337	90,024
Total debt	89,151	113,206
Insurance policy and claim reserves	1,001	1,010
Derivative related liabilities	28	461
Liability for post-retirement benefits	251	298
Other liabilities	1,894	2,418
Total liabilities	92,325	117,393
Shareholders' equity
Redeemable preferred stock, 1,501,100 shares authorized, Series B, $0.01 par value, 575,000 shares issued	575	575
Common shareholder's equity:
Common stock, $0.01 par value, 100 shares authorized, 64 shares issued at June 30, 2009 and 60 shares issued at December 31, 2008	-	-
Additional paid-in capital	22,721	21,485
Accumulated deficit	(12,350)	(7,245)
Accumulated other comprehensive loss	(753 )	(1,378 )
Total common shareholder's equity	9,618	12,862
Total liabilities and shareholders' equity	$ 102,518	$ 130,830

Six Months Ended June 30,	2009	2008
	(in millions)
Preferred stock
Balance at beginning and end of period	$ 575	$ 575
Common shareholder's equity
Additional paid-in capital
Balance at beginning of period	$ 21,485	$ 18,227
Excess of book value over consideration received on sale of  U.K.  operations to an HSBC affiliate	-	(196)
Capital contribution from parent company	2,285	2,200
Return of capital to parent company	(1,043)	-
Employee benefit plans, including transfers and other	(6 )	-
Balance at end of period	$ 22,721	$ 20,231
Accumulated deficit
Balance at beginning of period	$ (7,245)	$ (4,423)
Net loss	(5,087)	(1,190)
Dividend equivalents on HSBC's Restricted Share Plan	-	(3)
Dividends:
Preferred stock	(18 )	(18 )
Balance at end of period	$ (12,350 )	$ (5,634 )
Accumulated other comprehensive loss
Balance at beginning of period	$ (1,378)	$ (220)
Net change in unrealized gains (losses), net of tax, on:
Derivatives classified as cash flow hedges	561	46
Securities available for sale and interest-only strip receivables	36	(43)
Postretirement benefit plan adjustment, net of tax	15	(5)
Foreign currency translation adjustments	13	(17 )
Other comprehensive income (loss), net of tax	625	(19 )
Reclassification of foreign currency translation and pension adjustments to additional paid-in capital resulting from sale of  U.K.  operations	-	(380 )
Balance at end of period	$ (753 )	$ (619 )
Total common shareholder's equity	$ 9,618	$ 13,978
Comprehensive income (loss)
Net loss	$ (5,087)	$ (1,190)
Other comprehensive income (loss)	625	(19 )
Comprehensive income (loss)	$ (4,462 )	$ (1,209 )

Six Months Ended June 30,	2009	2008
	(in millions)
Cash flows from operating activities
Net loss	$ (5,087)	$ (1,190)
Loss from discontinued operations	-	(20 )
Loss from continuing operations	(5,087)	(1,210)
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	5,381	6,017
Gain on bulk sale of receivables to HSBC Bank  USA , National Association ("HSBC Bank  USA ")	(57)	-
Gain on receivable sales to HSBC affiliates	(218)	(122)
Goodwill and other intangible impairment	2,308	-
Loss on sale of real estate owned, including lower of cost or market adjustments	99	138
Insurance policy and claim reserves	(5)	(24)
Depreciation and amortization	103	128
Mark-to-market on debt designated at fair value and related derivatives	928	(271)
Gain on sale of Visa Class B shares	-	(11)
Net change in other assets	907	(66)
Net change in other liabilities	(577)	(788)
Originations of loans held for sale	(18,365)	(11,971)
Sales and collections on loans held for sale	18,713	12,100
Foreign exchange and FAS 133 movements on long term debt and net change in non-FVO related derivative assets and liabilities	(1,100)	1,375
Other-than-temporary impairment on securities	20	15
Lower of cost or fair value on receivables held for sale	343	201
Other, net	195	254
Cash provided by operating activities - continuing operations	3,588	5,765
Cash provided by operating activities - discontinued operations	-	337
Net cash provided by operating activities	3,588	6,102
Cash flows from investing activities
Securities:
Purchased	(227)	(425)
Matured	250	415
Sold	10	145
Net change in short-term securities available for sale	81	(379)
Net change in securities purchased under agreements to resell	(1,586)	(1,003)
Net change in interest bearing deposits with banks	(8)	261
Cash from sale of Visa Class B shares	-	11
Proceeds from sale of affiliate preferred stock shares to HSBC Plc	242	-
Receivables:
Net (originations) collections	4,774	2,811
Purchases and related premiums	(21)	(24)
Proceeds from sales of real estate owned	819	722
Cash received on sales of real estate secured receivables held in portfolio to a third party	-	134
Net cash received in sale of U.K. Operations to an affiliate	-	259
Cash received from bulk sales of receivables to HSBC Bank  USA	8,821	-
Purchases of properties and equipment	(24 )	(60 )
Cash provided by investing activities - continuing operations	13,131	2,867
Cash provided by investing activities - discontinued operations	-	2
Net cash provided by investing activities	13,131	2,869

Six Months Ended June 30,	2009	2008
	(in millions)
Cash flows from financing activities
Debt:
Net change in short-term debt	(3,861)	133
Net change in due to affiliates	(2,232)	29
Long term debt issued	1,600	2,293
Long term debt retired	(13,017)	(13,629)
Insurance:
Policyholders' benefits paid	(48)	(48)
Cash received from policyholders	26	28
Capital contribution from parent	2,010	2,200
Return of capital to parent	(1,043)	-
Preferred shareholders' dividends	(18 )	(18 )
Cash used in financing activities - continuing operations	(16,583)	(9,012)
Cash used in financing activities - discontinued operations	-	(255 )
Net cash used in financing activities	(16,583 )	(9,267 )
Effect of exchange rate changes on cash	-	17
Net change in cash	136	(279)
Cash at beginning of period^	255	783
Cash at end of period ^	$ 391	$ 504
Supplemental Noncash Investing and Capital Activities
Fair value of properties added to real estate owned	$ 662	$ 1,244
Transfer of receivables to held for sale	$ 516	$ 9,875
Transfer of receivables to held for investment	$ 804	$ -
Assumption of indebtedness by HSBC Bank  USA  related to the bulk receivable sale	$ (6,077 )	$ -
Redemption of the junior subordinated notes underlying the mandatorily redeemable preferred securities of the Household Capital Trust VIII for common stock	$ 275	$ -

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008(1)	2009	2008(1)
	(in millions)
Net interest income and other revenues	$ -	$ 58	$ -	$ 152
Insurance revenue	-	11	-	37
Provision for credit losses	-	(43)	-	(94)
Operating expenses	-	(36 )	-	(110 )
Loss before income tax (expense) benefit	-	(10)	-	(15)
Income tax (expense) benefit	-	(1 )	-	-
Loss from discontinued operations	$ -	$ (11 )	$ -	$ (15 )

(1)	Amounts shown for 2008 represent totals from the beginning of the period through the date of the sale.

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Net interest income and other revenues	$ -	$ 133	$ -	$ 274
Provision for credit losses	-	(57)	-	(106)
Operating expenses	-	(53 )	-	(110 )
Income before income tax (expense) benefit	-	23	-	58
Income tax (expense) benefit	-	(9 )	-	(23 )
Income from discontinued operations	$ -	$ 14	$ -	$ 35

Total
	(in millions)
Provision for credit losses:
Charge-offs to comply with FFIEC policies	$ (87)
Release of credit loss reserves	51
Reduction to income from continuing operations before income tax expense	(36)
Tax benefit	13
Reduction to net income from continuing operations	$ (23 )

	One-Time Termination and Other Employee Benefits	Lease Termination and Associated Costs	Other	Total
	(in millions)
Restructuring liability at December 31, 2008	$ -	$ -	$ -	$ -
Restructuring costs recorded during the first quarter of 2009	87	54	14	155
Restructuring costs paid during the first quarter of 2009	-	(4 )	(1 )	(5 )
Restructuring liability at March 31, 2009	87	50	13	150
Restructuring costs recorded during the period	-	-	-	-
Restructuring costs paid during the period	(53)	(19)	(5)	(77)
Adjustments to restructure liability during the period	(13 )	-	-	(13 )
Restructure liability at June 30, 2009	$ 21	$ 31	$ 8	$ 60

	One-Time Termination and Other Employee Benefits	Lease Termination and Associated Costs	Total
	(in millions)
Three months ended June 30, 2009:
Restructure liability at March 31, 2009	$ 3	$ 9	$ 12
Restructuring costs paid during the period	(2)	(1)	(3)
Adjustments to restructure liability during the period	(1 )	-	(1 )
Restructure liability at June 30, 2009	$ 0	$ 8	$ 8
Three months ended June 30, 2008:
Restructure liability at March 31, 2008	$ 3	$ -	$ 3
Restructuring costs paid during the period	(3 )	-	(3 )
Restructure liability at June 30, 2008	$ -	$ -	$ -

	One-Time Termination and Other Employee Benefits	Lease Termination and Associated Costs	Total
	(in millions)
Six months ended June 30, 2009:
Restructure liability at December 31, 2008	$ 10	$ 10	$ 20
Restructuring costs recorded during the period	1	-	1
Restructuring costs paid during the period	(10)	(2)	(12)
Adjustments to restructure liability during the period	(1 )	-	(1 )
Restructure liability at June 30, 2009	$ -	$ 8	$ 8
Six months ended June 30, 2008:
Restructure liability at December 31, 2007	$ -	$ -	$ -
Restructuring costs recorded during the period	3	-	3
Restructuring costs paid during the period	(3 )	-	(3 )
Restructuring liability at June 30, 2008	$ -	$ -	$ -

	One-Time Termination and Other Employee Benefits	Lease Termination and Associated Costs	Total
	(in millions)
Three months ended June 30, 2009:
Restructure liability at March 31, 2009	$ -	$ 16	$ 16
Restructuring costs recorded during the second quarter of 2009	-	-	-
Restructuring costs paid during the second quarter of 2009	-	(1 )	(1 )
Restructure liability at June 30, 2009	$ -	$ 15	$ 15
Three months ended June 30, 2008:
Restructure liability at March 31, 2008	$ 8	$ 31	$ 39
Restructuring costs recorded during the period	6	6	12
Restructuring costs paid during the period	(1)	(6)	(7)
Adjustments to restructure liability during the period	(5 )	(1 )	(6 )
Restructure liability at June 30, 2008	$ 8	$ 30	$ 38

	One-Time Termination and Other Employee Benefits	Lease Termination and Associated Costs	Total
	(in millions)
Six months ended June 30, 2009:
Restructure liability at December 31, 2008	$ 1	$ 17	$ 18
Restructuring costs paid during 2009	(1 )	(2 )	(3 )
Restructure liability at June 30, 2009	$ -	$ 15	$ 15
Six months ended June 30, 2008:
Restructure liability at December 31, 2007	$ 17	$ 37	$ 54
Restructuring costs recorded during the period	6	10	16
Restructuring costs paid during the period	(9)	(16)	(25)
Adjustments to restructure liability during the period	(6 )	(1 )	(7 )
Restructuring liability at June 30, 2008	$ 8	$ 30	$ 38

	One-Time Termination and Other Employee Benefits(1)	Lease Termination and Associated Costs(2)	Other(3)	Fixed Assets and Other Non-Cash Adjustments(4)	Total
	(in millions)
Six months ended June 30, 2009:
Consumer Lending closure(5)	$ 74	$ 54	$ 14	$ 16	$ 158
Facility closures	2	-	-	3	5
	$ 76	$ 54	$ 14	$ 19	$ 163
Six months ended June 30, 2008:
Card and Retail Services	$ 6	$ 6	$ -	$ -	$ 12
Auto Finance	3	-	-	-	3
Mortgage Services	(3)	4	-	11	12
Consumer Lending	(1)	(1)	-	6	4
Carmel  Facility	(2)	-	-	1	(1)
Canadian Business	2	(1 )	-	-	1
	$ 5	$ 8	$ -	$ 18	$ 31

(1)	One-time termination and other employee benefits are included as a component of Salaries and employee benefits in the consolidated statement of loss.
(2)	Lease termination and associated costs and fixed assets write-downs are included as a component of Occupancy and equipment expenses in the consolidated statement of loss.
(3)	The other expenses are included as a component of Other servicing and administrative expenses in the consolidated statement of loss.
(4)	Includes $29 million and $18 million of fixed asset write-offs during the six months ended June 30, 2009 and 2008, respectively, which were recorded as a component of Other servicing and administrative expenses in the consolidated statement of loss. The six months ended June 30, 2009 also includes $3 million relating to stock based compensation and other benefits as well as a curtailment gain of $16 million which were recorded as a component of Salaries and employee benefits in the consolidated statement of loss.
(5)	Excludes intangible asset impairment charges of $14 million recorded during the six months ended June 30, 2009.

June 30, 2009	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(in millions)
U.S.  Treasury	$ 111	$ 1	$ (1)	$ 111
U.S.  government sponsored enterprises(1)	120	4	(1)	123
U.S.  government agency issued or guaranteed	26	1	-	27
Obligations of  U.S.  states and political subdivisions	34	1	-	35
Asset-backed securities(2)	135	1	(30)	106
U.S.  corporate debt securities(3)	1,697	39	(55)	1,681
Foreign debt securities	295	11	(1)	305
Preferred equity securities	4	1	-	5
Money market funds	598	-	-	598
Subtotal	3,020	59	(88)	2,991
Accrued investment income	30	-	-	30
Total securities available-for-sale	$ 3,050	$ 59	$ (88 )	$ 3,021

December 31, 2008	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(in millions)
U.S.  Treasury	$ 56	$ 1	$ -	$ 57
U.S.  government sponsored enterprises(1)	149	6	-	155
U.S.  government agency issued or guaranteed	34	-	-	34
Obligations of  U.S.  states and political subdivisions	35	-	(1)	34
Asset-backed securities(2)	162	-	(34)	128
U.S.  corporate debt securities(3)	1,702	22	(68)	1,656
Foreign debt securities	268	5	(4)	269
Preferred equity securities(4)	64	1	(13)	52
Money market funds	679	-	-	679
Subtotal	3,149	35	(120)	3,064
Accrued investment income	30	-	-	30
Total securities available-for-sale	$ 3,179	$ 35	$ (120 )	$ 3,094

(1)	Includes primarily mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(2)	At June 30, 2009 and December 31, 2008, the majority of our asset-backed securities are residential mortgage-backed securities.
(3)	At June 30, 2009 and December 31, 2008, the majority of our  U.S.  corporate debt securities represent investments in the financial services, consumer products, healthcare and industrials sectors.
(4)	At December 31, 2008, substantially all of our preferred equity securities were perpetual preferred equity investments in the utilities and financial services sectors which were sold in the first half of 2009.

	Less Than One Year			Greater Than One Year
June 30, 2009	Number of Securities	Gross Unrealized Losses	Aggregate Fair Value of Investments	Number of Securities	Gross Unrealized Losses	Aggregate Fair Value of Investments
	(dollars are in millions)
U.S.  Treasury	12	$ (1)	$ 52	-	$ -	$ -
U.S.  government sponsored enterprises	5	(1)	10	1	-	-
U.S.  government agency issued or guaranteed	1	-	-	-	-	-
Obligations of  U.S.  states and political subdivisions	2	-	5	-	-	-
Asset-backed securities	2	(5)	9	28	(25)	47
U.S.  corporate debt securities	47	(5)	140	164	(50)	461
Foreign debt securities	6	-	19	5	(1)	15

	Less Than One Year			Greater Than One Year
December 31, 2008	Number of Securities	Gross Unrealized Losses	Aggregate Fair Value of Investments	Number of Securities	Gross Unrealized Losses	Aggregate Fair Value of Investments
	(dollars are in millions)
U.S.  government sponsored enterprises	3	$ -	$ 6	8	$ -	$ 4
U.S.  government agency issued or guaranteed	-	-	-	1	-	4
Obligations of  U.S.  states and political subdivisions	6	(1)	28	-	-	-
Asset-backed securities	30	(10)	90	15	(24)	19
U.S.  corporate debt securities	331	(39)	755	83	(29)	255
Foreign debt securities	25	(3)	69	12	(1)	20
Preferred equity securities	26	(6)	25	18	(7)	17

	At June 30, 2009
	Due Within 1 Year	After 1 but Within 5 Years	After 5 but Within 10 Years	After 10 Years	Total
	(dollars are in millions)
U.S.  Treasury:
Amortized cost	$ 27	$ 83	$ 1	$ -	$ 111
Fair value	27	83	1	-	111
Yield(1)	1.96%	1.69%	4.95%	-%	1.78%
U.S.  government sponsored enterprises:
Amortized cost	$ 2	$ 7	$ 49	$ 62	$ 120
Fair value	2	7	51	63	123
Yield(1)	2.31%	5.27%	4.67%	4.98%	4.83%
U.S.  government agency issued or guaranteed:
Amortized cost	$ -	$ -	$ -	$ 26	$ 26
Fair value	-	-	-	27	27
Yield(1)	-%	-%	-%	4.95%	4.95%
Obligations of  U.S.  states and political subdivisions:
Amortized cost	$ -	$ -	$ 17	$ 17	$ 34
Fair value	-	-	17	18	35
Yield(1)	-%	-%	4.01%	3.99%	4.00%
Asset-backed securities:
Amortized cost	$ 1	$ 13	$ 30	$ 91	$ 135
Fair value	1	13	31	61	106
Yield(1)	7.46%	5.45%	4.75%	3.60%	4.06%
U.S.  corporate debt securities:
Amortized cost	$ 115	$ 884	$ 182	$ 516	$ 1,697
Fair value	116	902	176	487	1,681
Yield(1)	4.04%	4.97%	5.16%	5.52%	5.09%
Foreign debt securities:
Amortized cost	$ 31	$ 211	$ 28	$ 25	$ 295
Fair value	32	219	28	26	305
Yield(1)	4.91%	4.71%	4.64%	6.51%	4.88%

(1)	Computed by dividing annualized interest by the amortized cost of respective investment securities.

	June 30, 2009	December 31, 2008
	(in millions)
Real estate secured	$ 67,054	$ 71,666
Auto finance	5,390	7,621
Credit card	11,938	13,231
Private label(1)	-	65
Personal non-credit card	13,640	15,568
Commercial and other	56	93
Total receivables	98,078	108,244
HSBC acquisition purchase accounting fair value adjustments, net	(7)	(26)
Accrued finance charges	2,436	2,445
Credit loss reserve for receivables	(12,834)	(12,415)
Unearned credit insurance premiums and claims reserves	(206 )	(227 )
Total receivables, net	$ 87,467	$ 98,021

(1)

On a continuing basis, private label receivables consist primarily of the liquidating retail sales contracts in our Consumer Lending business with a receivable balance of $28 million as of June 30, 2009. Beginning in the first quarter of 2009, we began reporting this liquidating portfolio prospectively within our personal non-credit card portfolio.

	Three Months Ended June 30,(1)(2)		Six Months Ended June 30,(1)(2)
	2009	2008	2009	2008
	(in millions)
Accretable yield at beginning of period	$ (29)	$ (33)	$ (28)	$ (36)
Accretable yield amortized to interest income during the period	8	9	15	18
Reclassification from non-accretable difference(3)	(1 )	(10 )	(9 )	(16 )
Accretable yield at end of period	$ (22 )	$ (34 )	$ (22 )	$ (34 )

(1)	For the Champion portfolio, there were no reclassifications to accretable yield from non-accretable difference during both the three and six months ended June 30, 2009. There was a reclassification to accretable yield from non-accretable difference of $3 million and $4 million during the three and six months ended June 30, 2008, respectively.
(2)	For the Metris portfolio, there was a reclassification to accretable yield from non-accretable difference of $1 million and $9 million during the three and six months ended June 30, 2009, respectively. There was a reclassification to accretable yield from non-accretable difference of $7 million and $12 million during the three and six months ended June 30, 2008, respectively.
(3)	Reclassification from non-accretable difference represents an increase to the estimated cash flows to be collected on the underlying portfolio.

	June 30, 2009	December 31, 2008
	(in millions)
TDR Loans(1):
Real estate secured:
Mortgage Services	$ 2,702	$ 2,662
Consumer Lending	1,758	1,674
Total real estate secured	4,460	4,336
Auto finance	248	191
Credit card	243	403
Personal non-credit card	727	590
Total TDR Loans	$ 5,678	$ 5,520

	June 30, 2009	December 31, 2008
	(in millions)
Credit loss reserves for TDR Loans:
Real estate secured:
Mortgage Services	$ 412	$ 383
Consumer Lending	379	341
Total real estate secured	791	724
Auto finance	58	45
Credit card	57	80
Personal non-credit card	175	108
Total credit loss reserves for TDR Loans(2)	$ 1,081	$ 957

(1)	Includes TDR balances reported as receivables held for sale for which there are no credit loss reserves as they are carried at lower of cost or fair value. At June 30, 2009, TDR loans include $14 million and $24 million of credit card and auto finance receivables held for sale, respectively. At December 31, 2008, TDR loans include $138 million of credit card receivables held for sale.
(2)	Included in credit loss reserves.

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2009
	(in millions)
Average balance of TDR Loans	$ 5,596	$ 4,137	$ 5,577	$ 3,860
Interest income recognized on TDR Loans	92	69	190	124

	June 30, 2009	December 31, 2008
	(in billions)
Interest-only loans	$ 1.7	$ 2.2
ARM loans(1)(2)	11.9	13.4
Stated income loans	4.6	5.2

(1)	At June 30, 2009 and December 31, 2008, $1.6 billion and $3.3 billion of our ARM loan portfolio will experience their first interest rate reset during the remainder of 2009 based on original contractual reset date and the outstanding receivable levels at the end of each period. ARM loans with initial reset dates after 2009 are not significant.
(2)	We do not have any option ARM loans in our portfolio.

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Credit loss reserves at beginning of period	$ 12,972	$ 10,876	$ 12,415	$ 10,413
Provision for credit losses	2,436	3,189	5,381	6,017
Charge-offs	(2,655)	(2,854)	(5,178)	(5,406)
Recoveries	137	200	272	387
Receivables transferred to held for sale	(56)	(640)	(56)	(640)
Release of credit loss reserves related to loan sales	-	(10)	-	(10)
Credit loss reserves at end of period	$ 12,834	$ 10,761	$ 12,834	$ 10,761

	June 30, 2009	December 31, 2008
	(in millions)
Real estate secured(1)	$ 41	$ 323
Auto finance	450	2,786
Credit card	609	13,571
Total receivables held for sale, net	$ 1,100	$ 16,680

	June 30, 2009	December 31, 2008
	(in millions)
Real estate secured receivables:
Consumer Lending	$ 5	$ 53
Mortgage Services	36	45
Total	$ 41	$ 98

	Receivables Held for  Sale
	(in millions)
Receivables held for sale - December 31, 2008	$ 16,680
Transfers of auto finance receivables into receivables held for sale at the lower of cost or fair value	450
Receivable sales	(14,853)
Additional lower of cost or fair value adjustment subsequent to transfer to receivables held for sale(1)	(333)
Transfer of real estate secured and credit card receivables into receivables held for investment	(804)
Net change in receivable balance	(40)
Receivables held for sale - June 30, 2009	$ 1,100

	(in millions)
Provision for credit losses(1)	$ 28
Other income(2)	10
Lower of cost or fair value adjustment	$ 38

	(in millions)
Valuation allowance at December 31, 2008	$ 358
Increase in allowance for net reductions in market value	333
Decreases in valuation allowance for loans sold, charged-off or transferred to held for investment	(444)
Valuation allowance at June 30, 2009	$ 247

	Gross	Cumulative Impairment  Charges	Accumulated  Amortization	Carrying  Value
	(in millions)
June 30, 2009
Purchased credit card relationships and related programs	$ 1,736	$ -	$ 924	$ 812
Consumer loan related relationships	333	163	170	-
Technology, customer lists and other contracts	282	9	258	15
Total	$ 2,351	$ 172	$ 1,352	$ 827
December 31, 2008
Purchased credit card relationships and related programs	$ 1,736	$ -	$ 855	$ 881
Consumer loan related relationships	333	158	170	5
Technology, customer lists and other contracts	282	-	246	36
Total	$ 2,351	$ 158	$ 1,271	$ 922

Year Ending December 31,	(in millions)
2009	$ 161
2010	141
2011	138
2012	135
2013	99
Thereafter	72

	2009	2008
	(in millions)
Balance at January 1,	$ 2,294	$ 2,635
Goodwill impairment related to Insurance Services business	(260)	-
Goodwill impairment related to Card and Retail Services business	(2,034)	-
Change in estimate of the tax basis of assets and liabilities	-	(3)
Balance at June 30,	$ -	$ 2,632

	Asset Derivatives			Liability Derivatives
		Fair Value as of			Fair Value as of
	Balance Sheet Location	June 30, 2009	December 31, 2008	Balance Sheet Location	June 30, 2009	December 31, 2008
		(in millions)			(in millions)
Interest rate swaps	Derivative financial assets	$ -	$ 19	Derivative related liabilities	$ -	$ 18
Currency swaps	Derivative financial assets	257	238	Derivative related liabilities	-	-
Total fair value hedges		$ 257	$ 257		$ -	$ 18

			Amount of Gain		Amount of Gain		Amount of Gain		Amount of Gain
		Location of	(Loss)		(Loss)		(Loss)		(Loss)
		Gain (Loss)	Recognized in		Recognized in		Recognized in		Recognized in
		Recognized in	Income		Income		Income		Income
		Income on	On the Derivative		On Hedged Items		On the Derivative		On Hedged Items
		Hedged Item	Three Months Ended June 30,				Six Months Ended June 30,
	Hedged Item	and Derivative	2009	2008	2009	2008	2009	2008	2009	2008
	(in millions)
Interest rate swaps	Fixed rate borrowings	Derivative Income	$ (4)	$ (45)	$ 4	$ 46	$ (8)	$ (23)	$ 15	$ 22
Currency swaps	Fixed rate borrowings	Derivative income	(9)	(60)	1	74	33	(30)	(32)	41
Total			$ (13)	$ (105)	$ 5	$ 120	$ 25	$ (53)	$ (17)	$ 63

	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value as of		Balance Sheet Location	Fair Value as of
		June 30, 2009	December 31, 2008		June 30, 2009	December 31, 2008
		in millions)			(in millions)
Interest rate swaps	Derivative financial assets	$ (567)	$ (1,056)	Derivative related liabilities	$ -	$ -
Currency swaps	Derivative financial assets	978	1,164	Derivative related liabilities	-	-
Total cash flow hedges		$ 411	$ 108		$ -	$ -

	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Gain (Loss) Reclassed from Accumulated OCI into Income (Effective Portion)		Location of Gain (Loss) Recognized in Income on the Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
	2009	2008		2009	2008		2009	2008
	(in millions)			(in millions)			(in millions)
Three Months Ended June 30,
Interest rate swaps	$ 234	$ 468	Interest expense	$ (4)	$ (3)	Derivative income	$ 8	$ 3
Currency swaps	202	344	Interest expense	(13 )	(22 )	Derivative income	24	2
Total	$ 436	$ 812		$ (17 )	$ (25 )		$ 32	$ 5
Six Months Ended June 30,
Interest rate swaps	$ 372	$ 99	Interest expense	$ (7)	$ (6)	Derivative income	$ 9	$ 2
Interest rate swaps	-	-	Gain on bulk receivable  sale to HSBC affiliates	(80)	-		-	-
Currency swaps	383	(89 )	Interest expense	(32 )	(53 )	Derivative income	62	1
Total	$ 755	$ 10		$ (119 )	$ (59 )		$ 71	$ 3

	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value as of		Balance Sheet Location	Fair Value as of
		June 30, 2009	December 31, 2008		June 30, 2009	December 31, 2008
		(in millions)			(in millions)
Interest rate contracts	Derivative financial assets	$ (68)	$ (324)	Derivative related liabilities	$ 33	$ -
Currency contracts	Derivative financial assets	16	44	Derivative related liabilities	-	-
Total non-qualifying hedges		$ (52)	$ (280)		$ 33	$ -

	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income On Derivative
		Three Months Ended June 30,		Six Months Ended June 30,
		2009	2008	2009	2008
		(in millions)
Interest rate contracts	Derivative income	$ 188	$ -	$ 172	$ 11
Currency contracts	Derivative income	(4)	7	(5)	7
Total		$ 184	$ 7	$ 167	$ 18

	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value as of		Balance Sheet Location	Fair Value as of
		June 30, 2009	December 31, 2008		June 30, 2009	December 31, 2008
		(in millions)			(in millions)
Interest rate swaps	Derivative financial assets	$ 1,097	$ 1,746	Derivative related liabilities	$ -	$ -
Currency swaps	Derivative financial assets	631	574	Derivative related liabilities	-	-
Total non-qualifying hedges		$ 1,728	$ 2,320		$ -	$ -

	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income On Derivative
		Three Months Ended June 30,		Six Months Ended June 30,
		2009	2008	2009	2008
		(in millions)
Interest rate contracts	Gain (loss) on debt designated at fair value and related derivatives	$ (295)	$ (730)	$ (309)	$ 97
Currency contracts	Gain (loss) on debt designated at fair value and related derivatives	(59)	(143)	95	(67)
Total		$ (354)	$ (873)	$ (214)	$ 30

	June 30, 2009	December 31, 2008
	(in millions)
Derivatives designated as hedging instruments:
Interest rate swaps	$ 18,673	$ 26,105
Currency swaps	16,366	18,648
	35,039	44,753
Non-qualifying economic hedges:
Derivatives not designated as hedging instruments:
Interest rate:
Swaps	6,648	3,610
Purchased caps	1,131	1,581
Foreign exchange:
Swaps	1,227	1,228
Forwards	391	2
	9,397	6,421
Derivatives associated with debt carried at fair value:
Interest rate swaps	20,919	25,104
Currency swaps	3,376	3,379
	24,295	28,483
Total	$ 68,731	$ 79,657

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Gains (losses)
Mark-to-market on debt designated at fair value(1):
Interest rate component	$ 707	$ 978	$ 888	$ (37)
Credit risk component	(5,122)	(969)	(1,331)	320
Total mark-to-market on debt designated at fair value	(4,415)	9	(443)	283
Mark-to-market on the related derivatives(1)	(505)	(930)	(485)	(12)
Net realized gains (losses) on the related derivatives	151	57	271	42
Total	$ (4,769)	$ (864)	$ (657)	$ 313

Three Months Ended June 30,	2009		2008
	(dollars are in millions)
Tax expense (benefit) at the U.S. Federal statutory income tax rate	$ (2,616)	(35.0)%	$ (787)	(35.0)%
Increase (decrease) in rate resulting from:
Goodwill impairment	574	7.7	-	-
Valuation allowance on deferred tax assets	541	7.2	6	.3
State and local taxes, net of Federal benefit and state valuation allowance	(24)	(.3)	(23)	(1.0)
Low income housing and other tax credits	(9)	(.1)	(12)	(.5)
Other	19	.2	15	.6
Total income tax expense (benefit)	$ (1,515)	(20.3)%	$ (801)	(35.6)%

Six Months Ended June 30,	2009		2008
	(dollars are in millions)
Tax expense (benefit) at the U.S. Federal statutory income tax rate	$ (2,011)	(35.0)%	$ (639)	(35.0)%
Increase (decrease) in rate resulting from:
Goodwill impairment	798	13.9	-	-
Valuation allowance on deferred tax assets	549	9.6	9	.5
Receivable portfolio affiliate sales	(47)	(.8)	-	-
State and local taxes, net of Federal benefit and state valuation allowance	6	.1	(49)	(2.7)
State rate change effect on net deferred taxes	32	.6	65	3.6
Low income housing and other tax credits	(18)	(.3)	(25)	(1.4)
Other	31	.4	23	1.3
Total income tax expense (benefit)	$ (660)	(11.5)%	$ (616)	(33.7)%

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Service cost - benefits earned during the period	$ 9	$ 15	$ 18	$ 30
Interest cost	18	18	35	36
Expected return on assets	(12)	(21)	(24)	(42)
Recognized losses	8	-	17	-
Net periodic benefit cost	$ 23	$ 12	$ 46	$ 24

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Service cost - benefits earned during the period	$ -	$ 1	$ 1	$ 2
Interest cost	3	3	6	7
Gain on curtailment	-	(4)	(16)	(4)
Recognized gains	(1)	(1)	(2)	(2)
Net periodic post-retirement benefit cost	$ 2	$ (1)	$ (11)	$ 3

	June 30, 2009	December 31, 2008
	(in millions)
Assets and (Liabilities):
Cash	$ 367	$ 237
Securities purchased under agreements to resell	1,610	1,025
Derivative related assets (liability), net	(23)	(461)
Affiliate preferred stock received in sale of  U.K.  credit card business	-	219
Other assets	152	310
Due to affiliates	(11,036)	(13,543)
Other liabilities	(179)	(272)

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Income/(Expense):
Interest expense paid to HSBC affiliates(1)	$ (291)	$ (264)	$ (588)	$ (519)
Interest income from HSBC affiliates	1	14	4	26
Net gain on bulk sale of receivables to HSBC Bank  USA	-	-	57	-
HSBC affiliate income:
Gain on receivable sales to HSBC affiliates:
Daily sales of domestic private label receivable originations	7	28	24	63
Daily sales of credit card receivables	83	39	192	59
Sales of real estate secured receivables	-	-	2	-
Total gain on receivable sales to HSBC affiliates	90	67	218	122
Loss on sale of affiliate preferred stock	(6)	-	(6)	-
Servicing and other fees from HSBC affiliates:
HSBC Bank  USA , National Association ("HSBC Bank  USA "):
Real estate secured servicing revenue	2	2	3	4
Private label and card receivable servicing and related fees	160	107	327	218
Auto finance receivable servicing and related fees	16	-	30	1
Other servicing, processing, origination and support revenues from HSBC Bank  USA  and other HSBC affiliates	13	7	22	20
HSBC Technology and Services ( USA ) Inc. ("HTSU")	3	4	5	8
Total servicing and other fees from HSBC affiliates	194	120	387	251
Taxpayer financial services loan origination and other fees	(1)	(1)	(11)	(13)
Support services from HSBC affiliates:
HTSU	(205)	(199)	(432)	(411)
HSBC Global Resourcing ( UK ) Ltd.	(43)	(43)	(87)	(85)
Other HSBC affiliates	(9)	(11)	(17)	(26)
Total support services from HSBC affiliates	(257)	(253)	(536)	(522)
Stock based compensation expense with HSBC	(2)	(10)	(17)	(33)
Insurance commission paid to HSBC Bank  Canada	(5)	(2)	(10)	(4)

	Private Label Receivables	Credit Card Receivables
	(in billions)
Receivables serviced for HSBC Bank  USA :
June 30, 2009	$ 15.7	$ 2.0
December 31, 2008	18.0	2.0
Receivables sold to HSBC Bank  USA  during the three months ended:
June 30, 2009	$ 3.8	$ 1.1
June 30, 2008	5.0	1.3
Receivables sold to HSBC Bank  USA  during the six months ended:
June 30, 2009	$ 7.4	$ 2.1
June 30, 2008	9.5	2.4

	Card and Retail Services	Consumer	All Other	Adjustments/ Reconciling Items	IFRS Management Basis Consolidated Totals	Management Basis Adjustments(2)	IFRS Adjustments(3)	IFRS Reclass- ifications(4)	U.S.  GAAP Consolidated Totals
	(in millions)
Three months ended June 30, 2009
Net interest income	$ 1,298	$ 977	$ 235	$ 1	$ 2,511	$ (718)	$ 34	$ (295)	$ 1,532
Other operating income (Total other revenues)	568	69	(4,612)	(5)(1)	(3,980)	(42)	(390)	368	(4,044)
Loan impairment charges (Provision for credit losses)	1,208	2,154	-	-	3,362	(720)	(206)	-	2,436
Operating expenses (Total costs and expenses)	986	262	836(5)	(5)	2,079	2	372	73	2,526
Profit (loss) before tax	(328)	(1,370)	(5,213)	1	(6,910)	(42)	(522)	-	(7,474)
Customer loans (Receivables)	40,981	90,197	1,072	-	132,250	(31,998)	(565)	(1,609)	98,078
Assets	39,292	87,713	10,539	(2)	137,542	(31,414)	(3,440)	(170)	102,518
Intersegment revenues	1	33	(29)	(5)(1)	-	-	-	-	-
Three months ended June 30, 2008
Net interest income	$ 1,263	$ 1,481	$ 80	$ -	$ 2,824	$ (349)	$ (139)	$ (25)	$ 2,311
Other operating income (Total other revenues)	773	23	(816)	(6)(1)	(26)	(14)	(146)	124	(62)
Loan impairment charges (Provision for credit losses)	1,236	2,150	8	-	3,394	(380)	185	(10)	3,189
Operating expenses (Total costs and expenses)	538	447	188	(8)	1,165	12	23	109	1,309
Profit (loss) before tax	262	(1,093)	(932)	2	(1,761)	5	(493)	-	(2,249)
Customer loans (Receivables)	46,778	109,783	1,864	-	158,425	(20,306)	(293)	(11,194)	126,632
Assets(5)	45,209	105,271	21,494	-	171,974	(19,276)	(7,032)	(182)	145,484
Intersegment revenues	4	45	(43)	(6)(1)	-	-	-	-	-

	Card and Retail Services	Consumer	All Other	Adjustments/ Reconciling Items	IFRS Management Basis Consolidated Totals	Management Basis Adjustments(2)	IFRS Adjustments(3)	IFRS Reclass- ifications(4)	U.S.  GAAP Consolidated Totals
	(in millions)
Six months ended June 30, 2009
Net interest income	$ 2,638	$ 2,012	$ 491	$ 1	$ 5,142	$ (1,442)	$ (170)	$ (319)	$ 3,211
Other operating income (Total other revenues)	1,228	30	(582)	(12)(1)	664	61	(355)	543	913
Loan impairment charges (Provision for credit losses)	2,719	4,589	-	-	7,308	(1,559)	(368)	-	5,381
Operating expenses (Total costs and expenses)	1,474	819	2,513(5)	(12)	4,794	5	(533)	224	4,490
Profit (loss) before tax	(327)	(3,366)	(2,604)	1	(6,296)	173	376	-	(5,747)
Intersegment revenues	3	67	(58 )	(12 )(1)	-	-	-	-	-
Six months ended June 30, 2008
Net interest income	$ 2,565	$ 3,044	$ (12)	$ -	$ 5,597	$ (712)	$ (188)	$ (50)	$ 4,647
Other operating income (Total other revenues)	1,617	(2)	493	(12)(1)	2,096	(51)	(103)	313	2,255
Loan impairment charges (Provision for credit losses)	2,260	4,308	13	-	6,581	(749)	200	(15)	6,017
Operating expenses (Total costs and expenses)	1,118	912	344	(15)	2,359	24	50	278	2,711
Profit (loss) before tax	804	(2,178)	124	3	(1,247)	(38)	(541)	-	(1,826)
Intersegment revenues	9	89	(86)	(12)(1)	-	-	-	-	-

(1)	Eliminates intersegment revenues.
(2)	Management Basis Adjustments represent the GM and UP credit card Portfolios and the auto finance, private label and real estate secured receivables transferred to HSBC Bank  USA .
(3)	IFRS Adjustments consist of the accounting differences between U.S. GAAP and IFRSs which have been described more fully below.
(4)	Represents differences in balance sheet and income statement presentation between IFRSs and U.S. GAAP.
(5)	At June 30, 2009, all of our goodwill has been fully written-off.

	Assets (Liabilities) Measured at Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
	(in millions)
June 30, 2009:
Derivative related assets(1)	$ 2,344	$ -	$ 2,344	$ -
Available for sale securities:
U.S.  Treasury	111	111	-	-
U.S.  government sponsored enterprises	123	21	100	2
U.S.  government agency issued or guaranteed	27	-	27	-
Obligations of  U.S.  states and political subdivisions	35	-	35	-
Asset-backed securities	106	-	70	36
U.S.  corporate debt securities	1,681	-	1,636	45
Foreign debt securities	305	16	283	6
Preferred equity securities	5	-	-	5
Money market funds	598	598	-	-
Accrued interest	30	1	28	1
Total available-for-sale securities	3,021	747	2,179	95
Long term debt carried at fair value	(25,855)	-	(25,855)	-
Derivative related liabilities	(33)	-	(33)	-
December 31, 2008:
Derivative related assets(1)	$ 2,406	$ -	$ 2,406	$ -
Available for sale securities:
U.S.  Treasury	57	57	-	-
U.S.  government sponsored enterprises	155	25	130	-
U.S.  government agency issued or guaranteed	34	-	34	-
Obligations of  U.S.  states and political subdivisions	34	-	34	-
Asset-backed securities	128	-	90	38
U.S.  corporate debt securities	1,656	-	1,572	84
Foreign debt securities	269	22	247	-
Preferred equity securities	52	-	1	51
Money market funds	679	679	-	-
Accrued interest	30	-	28	2
Total available-for-sale securities	3,094	783	2,136	175
Long term debt carried at fair value	(28,338)	-	(28,338)	-
Derivative related liabilities	(18)	-	(18)	-

(1)

The fair value disclosed does not include swap collateral which was a net liability of $2.3 billion and $2.9 billion at June 30, 2009 and December 31, 2008, respectively, and that we either received or deposited with our interest rate swap counterparties. Such swap collateral is recorded on our balance sheet at an amount which "approximates fair value" as discussed in FASB Staff Position No. FIN 39-1, "Amendment of FASB Interpretation No. 39" and is netted on the balance sheet with the fair value amount recognized for derivative instruments.

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Beginning balance at beginning of period	$ 113	$ -	$ 175	$ -
Transfers in (out) of Level 3, net	21	59	(34)	59
Purchases, sales, issuances and settlements (net)	(38)	-	(34)	-
Total gains or losses (realized/unrealized):
Included in income from continuing operations	-	-	(8)	-
Included in other comprehensive income	(1)	(8)	(3)	(8)
Net change in accrued interest	-	-	(1)	-
Ending balance at end of period	$ 95	$ 51	$ 95	$ 51

(1)	The changes in unrealized losses relate to assets no longer held on our balance sheet at either June 30, 2009 or 2008.

	Non-Recurring Fair Value Measurements as of June 30, 2009				Total Gains (Losses) for the Three Months Ended June 30, 2009	Total Gains (Losses) for the Six Months Ended June 30, 2009
	Level 1	Level 2	Level 3	Total
	(in millions)
Real estate secured	$ -	$ -	$ 36	$ 36	$ 2	$ -
Auto finance	-	450	-	450	(38)	(38)
Credit cards	-	-	609	609	(161)	(328)
Total receivables held for sale at fair value(1)	$ -	$ 450	$ 645	$ 1,095	$ (197)	$ (366)
Real estate owned(2)	$ -	$ 739	$ -	$ 739	$ (52)	$ (151)
Repossessed vehicles(2)	$ -	$ 33	$ -	$ 33	$ -(4)	$ -(4)
Goodwill(3)	$ -	$ -	$ -	$ -	$ (1,641)	$ (2,294)
Intangible assets(3)	$ -	$ -	$ -	$ -	$ -	$ (14)

	Non-Recurring Fair Value Measurements as of June 30, 2008				Total Gains (Losses) for the Three Months Ended June 30, 2008	Total Gains (Losses) for the Six Months Ended June 30, 2008
	Level 1	Level 2	Level 3	Total
	(in millions)
Real estate secured	$ -	$ 1,214	$ -	$ 1,214	$ (131)	$ (140)
Credit cards	-	1,580	-	1,580	(248)	(248)
Total receivables held for sale at fair value(1)	$ -	$ 2,794	$ -	$ 2,794	$ (379)	$ (388)
Real estate owned(2)	$ -	$ 1,296	$ -	$ 1,296	$ (98)	$ (218)
Repossessed vehicles(2)	$ -	$ 50	$ -	$ 50	$ -(4)	$ -(4)

(1)	Excludes $5 million and $6,323 million of receivables held for sale at June 30, 2009 and June 30, 2008 for which the fair value exceeds carrying value and therefore not recorded at fair value.
(2)	The fair value disclosed is unadjusted for transaction costs as required by FAS 157. The amounts recorded in the consolidated balance sheet are recorded net of transaction costs as required by FAS 144.
(3)	In accordance with the provisions of FAS 142, goodwill with a carrying amount of $260 million allocated to our Insurance Services business and $2,034 million allocated to our Card and Retail Services businesses was written down to its implied fair value of $0 million and $1,641 million, respectively, during the three months ended March 31, 2009. Additionally, technology, customer lists and customer loan related relationship intangible assets totaling $34 million were written down to their implied fair value of $20 million during the three months ended March 31, 2009. No write down of goodwill or intangible assets occurred during the three and six months ended June 30, 2008. During three months ended June 30, 2009, goodwill with a carrying amount of $1,641 million allocated to our Card and Retail Services business was written down to its implied fair value of $0 million.
(4)	Repossessed vehicles are typically sold within two months of repossession. As a result, fair value adjustments subsequent to repossession are not significant.

	June 30, 2009		December 31, 2008
	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
	(in millions)
Financial assets:
Cash	$ 391	$ 391	$ 255	$ 255
Interest bearing deposits with banks	33	33	25	25
Securities purchased under agreements to resell	2,611	2,611	1,025	1,025
Securities	3,021	3,021	3,094	3,094
Consumer receivables:
Mortgage Services:
First lien	16,834	10,225	18,512	11,527
Second lien	2,762	821	3,238	981
Total Mortgage Services	19,596	11,046	21,750	12,508
Consumer Lending:
First lien	35,230	23,129	37,986	25,085
Second lien	4,426	1,383	4,824	1,570
Total Consumer Lending real estate secured receivables	39,656	24,512	42,810	26,655
Non-real estate secured receivables	11,181	5,762	13,187	6,386
Total Consumer Lending	50,837	30,274	55,997	33,041
Credit card	9,984	8,522	11,130	9,968
Auto Finance	4,783	4,470	6,872	5,900
Total consumer receivables	85,200	54,312	95,749	61,417
Receivables held for sale	1,100	1,100	16,680	16,812
Due from affiliates	152	152	310	310
Derivative financial assets	1	1	8	8
Financial liabilities:
Commercial paper, bank and other borrowings	5,778	5,778	9,639	9,639
Due to affiliates	11,036	10,490	13,543	12,054
Long term debt carried at fair value	25,855	25,855	28,338	28,338
Long term debt not carried at fair value	46,482	41,001	61,686	54,147
Insurance policy and claim reserves	1,001	1,051	1,010	1,134
Derivative financial liabilities	28	28	461	461

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Loss from continuing operations before income tax, as reported	$ (7,474)	$ (2,249)	$ (5,747)	$ (1,826)
Change in value of fair value option debt	4,769	864	657	(313)
Goodwill and other intangible asset impairment charges	1,641	-	2,308	-
Loss from continuing operations before income tax, excluding above items	$ (1,064)	$ (1,385)	$ (2,782)	$ (2,139)

	Real Estate Secured Receivables				Credit Card Receivables
	Consumer Lending		Mortgage Services
Three Months Ended June 30,	2009	2008	2009	2008	2009	2008
	(in millions)
Credit loss reserves at beginning of period	$ 3,859	$ 1,605	$ 3,819	$ 3,806	$ 2,325	$ 2,600
Provision for credit losses	891	469	325	943	365	1,007
Charge-offs	(472)	(314)	(622)	(871)	(667)	(883)
Recoveries	5	2	7	7	53	106
Reserves on receivables transferred to held for sale	-	(31)	-	(38)	-	(571)
Release of credit loss reserves related to loan sales	-	-	-	(10)	-	-
Credit loss reserves at end of period	$ 4,283	$ 1,731	$ 3,529	$ 3,837	$ 2,076	$ 2,259

	Real Estate Secured Receivables				Credit Card Receivables
	Consumer Lending		Mortgage Services
Six Months Ended June 30,	2009	2008	2009	2008	2009	2008
	(in millions)
Credit loss reserves at beginning of period	$ 3,392	$ 1,386	$ 3,726	$ 3,573	$ 2,258	$ 2,646
Provision for credit losses	1,751	947	1,003	1,883	934	1,697
Charge-offs	(870)	(575)	(1,215)	(1,594)	(1,224)	(1,724)
Recoveries	10	4	15	23	108	211
Reserves on receivables transferred to held for sale	-	(31)	-	(38)	-	(571)
Release of credit loss reserves related to loan sales	-	-	-	(10)	-	-
Credit loss reserves at end of period	$ 4,283	$ 1,731	$ 3,529	$ 3,837	$ 2,076	$ 2,259

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(dollars are in millions)
Loss from continuing operations	$ (5,959)	$ (1,448)	$ (5,087)	$ (1,210)
Return on average owned assets	(22.11)%	(3.90)%	(9.02)%	(1.60)%
Return on average common shareholder's equity	(191.13)	(44.19)	(80.07)	(19.11)
Net interest margin	5.70	6.47	5.79	6.39
Consumer net charge-off ratio, annualized	10.01	7.66	9.50	7.11
Efficiency ratio(1)	(96.80)	57.23	109.10	38.36

As of June 30,	2009	2008
Receivables(2)	$ 98,078	$ 126,632
Two-month-and-over contractual delinquency ratio	15.08%	8.57%

(1)	Ratio of total costs and expenses less policyholders' benefits to net interest income and other revenues less policyholders' benefits.
(2)	Excludes receivables held for sale.

	Three Months Ended June 30,		Six Months Ended June 30,
	2009	2008	2009	2008
	(in millions)
Net loss - U.S. GAAP basis	$ (5,959)	$ (1,445)	$ (5,087)	$ (1,190)
Adjustments, net of tax:
Derivatives and hedge accounting (including fair value adjustments)	1	13	9	5
Intangible assets	9	12	21	33
Loan origination	16	19	31	31
Loan impairment	11	21	20	35
Loans held for sale	23	247	26	246
Interest recognition	2	6	4	(11)
Other-than-temporary impairments on available-for-sale securities	-	-	9	-
Securities	7	-	(68)	-
Present value of long term insurance business	43	-	43	-
Goodwill and intangible asset impairment charges	341	-	(615)
Loss on sale of U.K. Operations to an affiliate	-	(362)	-	(362)
Other	6	(3)	9	21
Net loss - IFRSs basis	(5,500)	(1,492)	(5,598)	(1,192)
Tax benefit - IFRSs basis	1,452	614	525	409
Loss before tax - IFRSs basis	$ (6,952)	$ (2,106)	$ (6,123)	$ (1,601)

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Receivables:
Real estate secured(1)(3)	$ 67,054	$ (2,521)	(3.6)%	$ (10,267)	(13.3)%
Auto finance	5,390	(1,230)	(18.6)	(7,131)	(57.0)
Credit card(4)	11,938	(100)	(.8)	(7,955)	(40.0)
Private label(2)	-	-	-	(96)	(100.0)
Personal non-credit card(2)	13,640	(1,124)	(7.6)	(3,062)	(18.3)
Commercial and other	56	(5)	(8.2)	(43)	(43.4)
Total receivables	$ 98,078	$ (4,980)	(4.8)%	$ (28,554)	(22.5)%
Receivables held for sale:
Real estate secured	$ 41	$ (8)	(16.3)%	$ (1,190)	(96.7)%
Auto finance	450	450	-	450	-
Credit card	609	(751)	(55.2)	(7,277)	(92.3)
Total receivables held for sale	$ 1,100	$ (309)	(21.9)%	$ (8,017)	(87.9)%
Total receivables and receivables held for sale:
Real estate secured(3)	$ 67,095	$ (2,529)	(3.6)%	$ (11,457)	(14.6)%
Auto finance	5,840	(780)	(11.8)	(6,681)	(53.4)
Credit card(4)	12,547	(851)	(6.4)	(15,232)	(54.8)
Private label(2)	-	-	-	(96)	(100.0)
Personal non-credit card(2)	13,640	(1,124)	(7.6)	(3,062)	(18.3)
Commercial and other	56	(5)	(8.2)	(43)	(43.4)
Total receivables and receivables held for sale	$ 99,178	$ (5,289)	(5.1)%	$ (36,571)	(26.9)%

(1) Real estate secured receivables are comprised of the following:

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Mortgage Services	$ 23,105	$ (1,159)	(4.8)%	$ (5,775)	(20.0)%
Consumer Lending	43,939	(1,362)	(3.0)	(4,491)	(9.3)
All other	10	-	-	(1)	(9.1)
Total real estate secured	$ 67,054	$ (2,521)	(3.6)%	$ (10,267)	(13.3)%

(2)	On a continuing basis, private label receivables consist primarily of the liquidating retail sales contracts in our Consumer Lending business with a receivable balance of $28 million and $37 million as of June 30, 2009 and March 31, 2009. Beginning in the first quarter of 2009, we began reporting this liquidating portfolio prospectively within our personal non-credit card portfolio.
(3)	During the first quarter of 2009, $214 million of Consumer Lending real estate secured receivables held for sale were reclassified to held for investment.
(4)	During the second quarter of 2009, $590 million of credit card receivables held for sale were reclassified to held for investment.

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Real estate secured:
Closed-end:
First lien(1)	$ 57,681	$ (1,892)	(3.2)%	$ (7,536)	(11.6)%
Second lien(1)	7,112	(492)	(6.5)	(2,130)	(23.0)
Revolving:
First lien(1)	226	(6)	(2.6)	(25)	(10.0)
Second lien(1)	2,035	(131)	(6.0)	(576)	(22.1)
Total real estate secured(2)	$ 67,054	$ (2,521)	(3.6)%	$ (10,267)	(13.3)%

(1)	Receivable classification between fixed rate, adjustable rate, and interest-only receivables is based on the classification at the time of receivable origination and does not reflect any changes in the classification that may have occurred as a result of any loan modifications.
(2)	Excludes receivables held for sale. Real estate secured receivables held for sale included $41 million, $49 million and $1.2 billion primarily of closed-end, first lien receivables at June 30, 2009, March 31, 2009 and June 30, 2008, respectively. During the first quarter of 2009, $214 million of Consumer Lending real estate secured receivables held for sale were reclassified to held for investment.

	June 30, 2009		March 31, 2009		June 30, 2008
	Mortgage Services	Consumer Lending	Mortgage Services	Consumer Lending	Mortgage Services	Consumer Lending
	(In millions)
Fixed rate(3)	$ 13,344(1)	$ 41,765(2)	$ 13,885(1)	$ 43,016(2)	$ 15,945(1)	$ 45,713(2)
Adjustable rate(3)	9,762	2,174	10,379	2,285	12,935	2,717
Total	$ 23,106	$ 43,939	$ 24,264	$ 45,301	$ 28,880	$ 48,430
First lien	$ 19,417	$ 38,496	$ 20,255	$ 39,556	$ 23,533	$ 41,941
Second lien	3,689	5,443	4,009	5,745	5,347	6,489
Total	$ 23,106	$ 43,939	$ 24,264	$ 45,301	$ 28,880	$ 48,430
Adjustable rate(3)	$ 8,418	$ 2,174	$ 8,863	$ 2,285	$ 10,342	$ 2,717
Interest only(3)	1,344	-	1,516	-	2,593	-
Total adjustable rate(3)	$ 9,762	$ 2,174	$ 10,379	$ 2,285	$ 12,935	$ 2,717
Total stated income	$ 4,625	$ -	$ 4,964	$ -	$ 6,516	$ -

(1)	Includes fixed rate interest-only receivables of $318 million, $331 million and $376 million at June 30, 2009, March 31, 2009 and June 30, 2008, respectively.
(2)	Includes fixed rate interest-only receivables of $41 million, $43 million and $47 million at June 30, 2009, March 31, 2009 and June 30, 2008, respectively.
(3)	Receivable classification between fixed rate, adjustable rate, and interest-only receivables is based on the classification at the time of receivable origination and does not reflect any changes in the classification that may have occurred as a result of any loan modifications which may have occurred.

	Three Months Ended
	June 30, 2009	Mar. 31, 2009	Dec. 31, 2008	Sept. 30, 2008	June 30, 2008
Number of REO properties at end of period	7,105	8,643	9,350	10,887	10,596
Number of properties added to REO inventory in the period	3,463	4,143	3,313	5,416	5,606
Average loss on sale of REO properties(1)	13.0%	16.9%	13.3%	11.0%	11.0%
Average total loss on foreclosed properties(2)	52.4%	52.0%	46.8%	42.2%	40.0%
Average time to sell REO properties (in days)	194	201	180	174	171

(1)	The average loss on sale of foreclosed properties is calculated based on cash proceeds, after deducting selling costs, minus the unpaid loan principal balance and any other ancillary amounts owed (e.g., real estate tax advances). This amount is divided by the unpaid loan principal balance plus any other ancillary amounts.
(2)	The average total loss on foreclosed properties sold each quarter includes both the loss on sale and the cumulative write-downs recognized on the loans up to and upon classification as "Real Estate Owned." This average total loss on foreclosed properties is expressed as a percentage of the unpaid loan principal balance plus any other ancillary amounts owed (e.g., real estate tax advances).

	2009		2008		Increase (Decrease)
	$	%(1)	$	%(1)	Amount	%
	(dollars are in millions)
Three months ended June 30,
Finance and other interest income	$ 2,594	9.65%	$ 3,890	10.88%	$ (1,296)	(33.3)%
Interest expense	1,062	3.95	1,579	4.41	(517)	(32.7)
Net interest income	$ 1,532	5.70%	$ 2,311	6.47%	$ (779)	(33.7)%
Six months ended June 30,
Finance and other interest income	$ 5,440	9.80%	$ 7,999	11.00%	$ (2,559)	(32.0)%
Interest expense	2,229	4.01	3,352	4.61	(1,123)	(33.5)
Net interest income	$ 3,211	5.79%	$ 4,647	6.39%	$ (1,436)	(30.9)%

(1)	% Columns: comparison to average interest-earning assets.

	2009	2008
Net interest margin - Three months ended June 30, 2008 and 2007, respectively	6.47%	6.40%
Impact to net interest margin resulting from:
Receivable yields:
Receivable pricing	(.17)	(.07)
Receivable mix	(.36)	.19
Impact of non-performing assets	(.56)	(.53)
Non-insurance investment income	(.24)	(.11)
Cost of funds	.56	.59
Net interest margin - Three months ended June 30, 2009 and 2008, respectively	5.70%	6.47%

	2009	2008
Net interest margin - Six months ended June 30, 2008 and 2007, respectively	6.39%	6.32%
Impact to net interest margin resulting from:
Receivable yields:
Receivable pricing	(.21)	.06
Receivable mix	(.32)	.22
Impact of non-performing assets	(.52)	(.55)
Non-insurance investment income	(.24)	(.07)
Cost of funds	.69	.41
Net interest margin - Six months ended June 30, 2009 and 2008, respectively	5.79%	6.39%

	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Three months ended June 30,	$ 2,436	$ 3,189	$ (753)	(23.6)%
Six months ended June 30,	5,381	6,017	(636)	(10.6)

Three Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Insurance revenue	$ 85	$ 108	$ (23)	(21.3)%
Investment income	25	20	5	25.0
Derivative income	208	27	181	100+
Gain (loss) on debt designated at fair value and related derivatives	(4,769)	(864)	(3,905)	100+
Fee income	151	434	(283)	(65.2)
Enhancement services revenue	124	173	(49)	(28.3)
Taxpayer financial services revenue	3	6	(3)	(50.0)
Gain on bulk sale of receivables to HSBC Bank  USA	-	-	-	-
Gain on receivable sales to HSBC affiliates	90	67	23	34.3
Servicing and other fees from HSBC affiliates	194	120	74	61.7
Lower of cost or fair value adjustment on receivables held for sale	(173)	(194)	21	10.8
Other income	18	41	(23)	(56.1)
Total other revenues	$ (4,044)	$ (62)	$ (3,982)	100+%

Six Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Insurance revenue	$ 178	$ 213	$ (35)	(16.4)%
Investment income	32	45	(13)	(28.9)
Derivative income	246	31	215	100+
Gain (loss) on debt designated at fair value and related derivatives	(657)	313	(970)	(100+)
Fee income	379	892	(513)	(57.5)
Enhancement services revenue	259	357	(98)	(27.5)
Taxpayer financial services revenue	93	155	(62)	(40.0)
Gain on bulk sale of receivables to HSBC Bank  USA	57	-	57	-
Gain on receivable sales to HSBC affiliates	218	122	96	78.7
Servicing and other fees from HSBC affiliates	387	251	136	54.2
Lower of cost or fair value adjustment on receivables held for sale	(343)	(201)	(142)	(70.6)
Other income	64	77	(13)	(16.9)
Total other revenues	$ 913	$ 2,255	$ (1,342)	(59.5)%

Three Months Ended June 30,	2009	2008
	(in millions)
Net realized gains (losses)	$ (33)	$ 5
Mark-to-market on derivatives which do not qualify as effective hedges	217	2
Ineffectiveness	24	20
Total	$ 208	$ 27
Six Months Ended June 30,	2009	2008
	(in millions)
Net realized gains (losses)	$ (53)	$ 5
Mark-to-market on derivatives which do not qualify as effective hedges	220	13
Ineffectiveness	79	13
Total	$ 246	$ 31

Three Months Ended June 30,	2009	2008
	(in millions)
Mark-to-market on debt designated at fair value(1):
Interest rate component	$ 707	$ 978
Credit risk component	(5,122)	(969)
Total mark-to-market on debt designated at fair value	(4,415)	9
Mark-to-market on the related derivatives	(505)	(930)
Net realized gains on the related derivatives	151	57
Total	$ (4,769)	$ (864)

Six Months Ended June 30,	2009	2008
	(in millions)
Mark-to-market on debt designated at fair value(1):
Interest rate component	$ 888	$ (37)
Credit risk component	(1,331)	320
Total mark-to-market on debt designated at fair value	(443)	283
Mark-to-market on the related derivatives	(485)	(12)
Net realized gains on the related derivatives	271	42
Total	$ (657)	$ 313

(1)

Mark-to-market on debt designated at fair value and related derivatives excludes market value changes due to fluctuations in foreign currency exchange rates. Foreign currency translation gains (losses) recorded in derivative income associated with debt designated at fair value was a loss of $(188) million and a gain of $41 million for the three months ended June 30, 2009 and 2008, respectively. Foreign currency translation gains (losses) was a gain of $8 million and a loss of $(305) million for the six months ended June 30, 2009 and 2008, respectively. Offsetting gains (losses) recorded in derivative income associated with the related derivatives was a gain of $188 million and a loss of $(41) million for the three months ended June 30, 2009 and 2008, respectively, and a loss of $(8) million and a gain of $305 million for the six months ended June 30, 2009 and 2008, respectively.

Three Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Salaries and employee benefits	$ 270	$ 433	$ (163)	(37.6)%
Sales incentives	-	16	(16)	(100.0)
Occupancy and equipment expenses	22	56	(34)	(60.7)
Other marketing expenses	27	87	(60)	(69.0)
Real estate owned expenses	41	64	(23)	(35.9)
Other servicing and administrative expenses	181	307	(126)	(41.0)
Support services from HSBC affiliates	257	253	4	1.6
Amortization of intangibles	39	42	(3)	(7.1)
Policyholders' benefits	48	51	(3)	(5.9)
Goodwill and other intangible asset impairment charges	1,641	-	1,641	100.0
Total costs and expenses	$ 2,526	$ 1,309	$ 1,217	93.0%

Six Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Salaries and employee benefits	$ 685	$ 875	$ (190)	(21.7)%
Sales incentives	5	36	(31)	(86.1)
Occupancy and equipment expenses	113	110	3	2.7
Other marketing expenses	77	215	(138)	(64.2)
Real estate owned expenses	146	190	(44)	(23.2)
Other servicing and administrative expenses	436	563	(127)	(22.6)
Support services from HSBC affiliates	536	522	14	2.7
Amortization of intangibles	81	97	(16)	(16.5)
Policyholders' benefits	103	103	-	-
Goodwill and other intangible asset impairment charges	2,308	-	2,308	100.0
Total costs and expenses	$ 4,490	$ 2,711	$ 1,779	65.6%

	2009	2008
Three months ended June 30,	(96.80)%	57.23%
Six months ended June 30,	109.10	38.36%

Three Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Net interest income	$ 1,298	$ 1,263	$ 35	2.8%
Other operating income	568	773	(205)	(26.5)
Loan impairment charges	1,208	1,236	(28)	(2.3)
Operating expenses, excluding goodwill impairment charges	456	538	(82)	(15.2)
Profit (loss) before tax and goodwill impairment charges	202	262	(60)	(22.9)%
Goodwill impairment charges(1)	530	-	530	100.0
Profit (loss) before tax	(328)	262	(590)	(100+)
Intersegment revenues	1	4	(3)	(75.0)
Customer loans	40,981	46,778	(5,797)	(12.4)
Assets	39,292	45,209	(5,917)	(13.1)
Net interest margin, annualized	12.33%	10.79%	-	-
Return on average assets	(4.12)	1.42	-	-

Six Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Net interest income	$ 2,638	$ 2,565	$ 73	2.8%
Other operating income	1,228	1,617	(389)	(24.1)
Loan impairment charges	2,719	2,260	459	20.3
Operating expenses, excluding goodwill impairment charges	944	1,118	(174)	(15.6)
Profit (loss) before tax and goodwill impairment charges	203	804	(601)	(74.8)
Goodwill impairment charges(1)	530	-	530	100.0
Profit (loss) before tax	(327)	804	(1,131)	(100+)
Intersegment revenues	3	9	(6)	(66.7)
Net interest margin, annualized	12.18%	10.80%	-	-
Return on average assets	(2.04)	2.21	-	-

(1)	Goodwill impairment charges of $530 million recorded during the three months ended June 30, 2009 were not deductible for tax purposes.

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Credit card	$ 25,087	$ (1,246)	(4.7)%	$ (4,204)	(14.4)%
Private label	15,772	(630)	(3.8)	(1,553)	(9.0)
Other	122	(10)	(7.6)	(40)	(24.7)
Total loans	$ 40,981	$ (1,886)	(4.4)%	$ (5,797)	(12.4)%

	Quarter Ended					Change between June 30, 2009 and June 30, 2008
	June 30, 2009	Mar. 31, 2009	Dec. 31, 2008	Sept. 30, 2008	June 30, 2008
	(dollars are in millions)
Receivables:
Non-prime	$ 10,426	$ 11,164	$ 12,247	$ 12,651	$ 12,878	(19.0)%
Prime	27,760	28,805	31,344	30,778	30,886	(10.1)
Other	2,795	2,898	3,139	3,077	3,014	(7.3)
Total	$ 40,981	$ 42,867	$ 46,730	$ 46,506	$ 46,778	(12.4)%
Net Interest Margin:
Non-prime	19.57%	20.36%	17.96%	17.49%	17.05%	14.8%
Prime	9.00	9.10	7.75	7.70	7.67	17.3
Other	17.88	8.71	11.49	12.67	15.94	12.2
Total	12.33%	12.04%	10.76%	10.72%	10.79%	14.3%
Delinquency Ratio:
Non-prime	10.02%	11.04%	9.69%	9.11%	8.26%	21.3%
Prime	4.49	4.54	4.00	3.55	3.26	37.7
Other	8.54	9.43	8.48	7.46	6.58	29.8
Total	6.17%	6.57%	5.79%	5.32%	4.85%	27.2%

Three Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Net interest income	$ 977	$ 1,481	$ (504)	(34.0)%
Other operating income	69	23	46	100+
Loan impairment charges	2,154	2,150	4	.2
Operating expenses	262	447	(185)	(41.4)
Loss before tax	(1,370)	(1,093)	(277)	(25.3)
Intersegment revenues	33	45	(12)	(26.7)
Customer loans	90,197	109,783	(19,586)	(17.8)
Assets	87,713	105,271	(17,558)	(16.7)
Net interest margin, annualized	4.18%	5.30%	-	-
Return on average assets	(3.90)	(2.60)	-	-

Six Months Ended June 30,	2009	2008	Increase (Decrease)
			Amount	%
	(dollars are in millions)
Net interest income	$ 2,012	$ 3,044	$ (1,032)	(33.9)%
Other operating income	30	(2)	32	100+
Loan impairment charges	4,589	4,308	281	6.5
Operating expenses	819	912	(93)	(10.2)
Loss before tax	(3,366)	(2,178)	(1,188)	(54.6)
Intersegment revenues	67	89	(22)	(24.7)
Net interest margin, annualized	4.20%	5.35%	-	-
Return on average assets	(4.74)	(2.54)	-	-

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Real estate secured(1)	$ 68,738	$ (2,574)	(3.6)%	$ (11,736)	(14.6)%
Auto finance	7,736	(1,785)	(18.7)	(4,799)	(38.3)
Private label(2)	-	-	-	(83)	(100.0)
Personal non-credit card	13,723	(1,095 )	(7.4 )	(2,968 )	(17.8 )
Total customer loans	$ 90,197	$ (5,454 )	(5.7 )%	$ (19,586 )	(17.8 )%

(1)	Real estate secured receivables are comprised of the following:

	June 30, 2009	Increases (Decreases) From
		March 31, 2009		June 30, 2008
		$	%	$	%
	(dollars are in millions)
Mortgage Services	$ 25,019	$ (1,239)	(4.7)%	$ (6,427)	(20.4)%
Consumer Lending	43,719	(1,335 )	(3.0 )	(5,309 )	(10.8 )
Total real estate secured	$ 68,738	$ (2,574 )	(3.6 )%	$ (11,736 )	(14.6 )%

(2)

Private label receivables consisted primarily of the liquidating retail sales contracts in our Consumer Lending business with a receivable balance of $28 million and $37 million as of June 30, 2009 and March 31, 2009. Beginning in the first quarter of 2009, we began reporting this liquidating portfolio prospectively within our personal non-credit card portfolio.

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Credit loss reserves	$ 12,834	$ 12,972	$ 10,761
Reserves as a percent of:
Receivables	13.09%	12.59%	8.50%
Net charge-offs(1)	127.4(2)	135.8(2)	105.0(2)
Nonperforming loans	110.9(2)	108.4(2)	118.8(2)

(1)	Net charge-offs for the quarter, annualized, as a percentage of average consumer receivables for the quarter.
(2)	Ratio excludes nonperforming receivables and charge-offs associated with receivable portfolios which are considered held for sale as these receivables are carried at the lower of cost or fair value with no corresponding credit loss reserves.

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Dollars of Contractual Delinquency:
Continuing operations:
Real estate secured(1)	$ 10,694	$ 10,658	$ 6,969
Auto finance(2)	298	245	441
Credit card(2)	1,280	1,503	1,609
Private label(3)	-	-	19
Personal non-credit card	2,675	2,816	2,591
Total consumer - continuing operations(2)	14,947	15,222	11,629
Discontinued Operations	-	-	204
Total consumer	$ 14,947	$ 15,222	$ 11,833
Delinquency Ratio:
Continuing operations:
Real estate secured(1)	15.94%	15.31%	8.87%
Auto finance(2)	5.11	3.70	3.52
Credit card(2)	10.20	11.22	5.79
Private label(3)	-	-	20.08
Personal non-credit card	19.61	19.07	15.51
Total consumer - continuing operations(2)	15.08	14.58	8.57
Discontinued Operations	-	-	4.46
Total consumer	15.08%	14.58%	8.44%

(1)	Real estate secured two-months-and-over contractual delinquency and as a percentage of consumer receivables and receivables held for sale for our Mortgage Services and Consumer Lending businesses are comprised of the following:

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Dollars of Contractual Delinquency:
Mortgage Services:
First lien	$ 3,567	$ 3,747	$ 3,301
Second lien	612	707	891
Total Mortgage Services	$ 4,179	$ 4,454	$ 4,192
Consumer Lending:
First lien	$ 5,641	$ 5,323	$ 2,195
Second lien	874	881	582
Total Consumer Lending	$ 6,515	$ 6,204	$ 2,777
Delinquency Ratio:
Mortgage Services:
First lien	18.34%	18.46%	13.79%
Second lien	16.59	17.64	16.66
Total Mortgage Services	18.05%	18.33%	14.31%
Consumer Lending::
First lien	14.65%	13.45%	5.13%
Second lien	16.06	15.33	8.97
Total Consumer Lending	14.82%	13.69%	5.64%

(2)

The trend in dollars of contractual delinquency and the delinquency ratio for our credit card and auto finance portfolios as of June 30, 2009 and March 31, 2009 as compared to the year-ago period was significantly impacted by the sale of our GM and UP Portfolios as well as the sale of certain non-delinquent auto finance receivables to HSBC Bank USA in January 2009. The following table presents on a proforma basis, the delinquency dollars and delinquency ratios for the credit card and auto finance portfolios and for total consumer-continuing operations excluding these receivables from all periods presented:

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Dollars of contractual delinquency excluding the sold credit card and auto finance receivables from all periods:
Auto finance	$ 298	$ 245	$ 441
Credit card	1,280	1,503	1,256
Total consumer - continuing operations	14,947	15,222	11,276
Delinquency ratio excluding the sold credit card and auto finance receivables from all periods:
Auto finance	5.11%	3.70%	4.63%
Credit card	10.20	11.22	8.38
Total consumer - continuing operations	15.08	14.58	9.40

(3)

On a continuing operations basis, private label receivables consisted primarily of the retail sales contracts in our Consumer Lending business which are liquidating. In the first quarter of 2009, we began reporting this liquidating portfolio on a prospective basis within our personal non-credit card portfolio.

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Net Charge-off dollars:
Continuing operations:
Real estate secured(1)	$ 1,081	$ 979	$ 1,175
Auto finance(2)	102	247	135
Credit card(2)	612	499	774
Private label(3)	-	-	8
Personal non-credit card	723	663	562
Total consumer - continuing operations(2)	2,518	2,388	2,654
Discontinued Operations	-	-	87
Total consumer	$ 2,518	$ 2,388	$ 2,741
Net Charge-off ratio:
Continuing operations:
Real estate secured(1)	6.33%	5.54%	5.85%
Auto finance(2)	6.51	13.88	4.29
Credit card(2)	20.77	15.48	10.85
Private label(3)	-	-	29.23
Personal non-credit card	20.35	17.37	13.18
Total consumer - continuing operations(2)	10.01	9.02	7.66
Discontinued Operations	-	-	4.33
Total consumer	10.01%	9.02%	7.47%
Real estate secured net charge-offs and REO expense as a percent of average real estate secured receivables	6.56%	6.14%	6.17%

(1)	Real estate secured net charge-off dollars, annualized, as a percentage of average consumer receivables for our Mortgage Services and Consumer Lending businesses are comprised of the following:

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Net Charge-off dollars:
Mortgage Services:
First lien	$ 355	$ 392	$ 389
Second lien	259	193	474
Total Mortgage Services	$ 614	$ 585	$ 863
Consumer Lending:
First lien	$ 234	$ 185	$ 143
Second lien	233	209	169
Total Consumer Lending	$ 467	$ 394	$ 312
Net Charge-off Ratio:
Mortgage Services:
First lien	7.16%	7.56%	6.25%
Second lien	27.02	18.83	33.45
Total Mortgage Services	10.38%	9.42%	11.29%
Consumer Lending::
First lien	2.39%	1.85%	1.33%
Second lien	16.59	14.45	10.20
Total Consumer Lending	4.18%	3.44%	2.50%

(2)

The trend in net charge-off dollars and the net charge-off ratio for our credit card and auto finance portfolios as of June 30, 2009 and March 31, 2009 as compared to the year-ago period was significantly impacted by the sale of our GM and UP Portfolios as well as the sale of certain non-delinquent auto finance receivables to HSBC Bank USA in January 2009. The following table presents on a proforma basis, the net charge-off dollars and the net charge-off ratio for the credit card and auto finance portfolios and for total consumer-continuing operations excluding these receivables from all periods presented:

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Net charge-off dollars excluding the sold credit card and auto finance receivables from all periods:
Auto finance	$ 102	$ 247	$ 135
Credit card	612	499	581
Total consumer - continuing operations	2,518	2,388	2,461
Net charge-off ratio excluding the sold credit card and auto finance receivables from all periods:
Auto finance	6.51%	13.88%	5.63%
Credit card	20.77	15.48	14.81
Total consumer - continuing operations	10.01	9.02	8.02

(3)

On a continuing operations basis, private label receivables consisted primarily of the retail sales contracts in our Consumer Lending business which are liquidating. In the first quarter of 2009, we began reporting this liquidating portfolio on a prospective basis within our personal non-credit card portfolio

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Continuing operations:
Nonaccrual receivables(1)	$ 10,800	$ 11,018	$ 8,025
Nonaccrual receivables held for sale	55	29	25
Accruing credit card receivables 90 or more days delinquent(2)	776	947	1,031
Accruing credit card receivables 90 or more days delinquent held for sale(2)	169	179	123
Total nonperforming receivables	11,800	12,173	9,204
Real estate owned	629	764	1,126
Total nonperforming assets - continuing operations	12,429	12,937	10,330
Discontinued operations	-	-	172
Total nonperforming assets	$ 12,429	$ 12,937	$ 10,502
Credit loss reserves as a percent of nonperforming receivables - continuing operations(3)	110.9%	108.4%	118.8%

(1)	Nonaccrual receivables are comprised of the following:

	June 30, 2009	March 31, 2009	June 30, 2008
	(in millions)
Real estate secured:
Closed-end:
First lien	$ 7,179	$ 7,132	$ 4,297
Second lien	850	934	857
Revolving:
First lien	5	4	4
Second lien	297	323	298
Total real estate secured	8,331	8,393	5,456
Auto finance	272	245	441
Private label	-	-	16
Personal non-credit card	2,197	2,380	2,112
Total nonaccrual receivables	$ 10,800	$ 11,018	$ 8,025

(2)	Consistent with industry practice, accruing credit card receivables 90 or more days delinquent includes credit card receivables.
(3)	Ratio excludes nonperforming receivables associated with receivable portfolios which are considered held for sale as these receivables are carried at the lower of cost or fair value with no corresponding credit loss reserves.

	June 30, 2009	March 31, 2009	June 30, 2008
	(in millions)
Real estate secured	$ 760	$ 805	$ 240
Auto finance	15	10	15
Credit card	6	6	9
Personal non-credit card	146	144	37
Total	$ 927	$ 965	$ 301

Status as of June 30, 2009	Number of Loans	Outstanding Receivable Balance at Time of Modification
Current or less than 30-days delinquent	53%	51%
30- to 59-days delinquent	6	7
60-days or more delinquent	9	9
Paid-in-full	15	14
Charged-off, transferred to real estate owned or sold	17	19
	100%	100%

Six Months Ended June 30, 2009	Number of Accounts Modified		Outstanding Receivable Balance at Time of Modification
	Consumer Lending	Mortgage Services	Consumer Lending	Mortgage Services
	(accounts are in thousands)		(dollars are in millions)
Foreclosure Avoidance/Account Modification Programs(1)(2)	35.5(3)	34.2	$ 5,100(3)	$ 4,700

	Number of Loans	Outstanding Receivable Balance at Time of Modification
Current or less than 30-days delinquent	53%	52%
30- to 59-days delinquent	10	10
60-days or more delinquent	20	23
Paid-in-full	5	4
Charged-off	8	5
Transferred to real estate owned or sold	4	6
	100%	100%

	Number of Accounts(1)		Outstanding Receivable Balance(1) (4)
	Consumer Lending(5)(6)	Mortgage Services	Consumer Lending(5)(6)	Mortgage Services
	(accounts are in thousands)		(dollars are in millions)
June 30, 2009:
Loans re-aged only	91.7	39.5	$ 7,907	$ 3,824
Loans modified only(2)	17.0	11.2	2,309	1,537
Loans modified and re-aged	60.9	51.6	8,291	7,289
Total loans modified and/or re-aged(3)	169.6	102.3	$ 18,507	$ 12,650
March 31, 2009:
Loans re-aged only	80.4	42.5	$ 7,192	$ 4,189
Loans modified only(2)	15.0	11.3	2,041	1,565
Loans modified and re-aged	54.2	45.5	7,288	6,511
Total loans modified and/or re-aged(3)	149.6	99.3	$ 16,521	$ 12,265
June 30, 2008:
Loans re-aged only	83.9	50.2	$ 7,645	$ 5,248
Loans modified only(2)	1.9	11.6	205	1,823
Loans modified and re-aged	24.4	20.3	3,082	3,038
Total loans modified and/or re-aged	110.2	82.1	$ 10,932	$ 10,109

(1)	Loans which have been granted a permanent modification, a twelve-month or longer modification, or two or more consecutive six-month modifications are considered troubled debt restructurings for purposes of determining loss reserve estimates under Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan." For additional information related to our troubled debt restructurings, see Note 6, "Receivables," to our accompanying consolidated financial statements.
(2)	Includes loans that have been modified under the Proactive ARM Modification program described above.
(3)	The following table provides information at June 30, 2009 regarding the delinquency status of loans granted modifications of loan terms and/or re-ages of the account:

	Number of Accounts		Outstanding  Receivable Balance
	Consumer Lending	Mortgage Services	Consumer Lending	Mortgage Services
Current or less than 30-days delinquent	64%	67%	60%	65%
30- to 59-days delinquent	13	10	13	10
60-days or more delinquent	23	23	27	25
	100%	100%	100%	100%

(4)	The outstanding receivable balance included in this table reflects the principal amount outstanding on the loan excluding any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans.
(5)	Prior to June 30, 2009, the modification and re-age totals we reported for our Consumer Lending business excluded any modifications or re-ages related to the Consumer Lending purchased receivable portfolios. Beginning in the second quarter of 2009, the table above includes modifications and re-ages related to these purchased receivable portfolios. At June 30, 2009, 140 loans in the Consumer Lending purchased receivable portfolios have been modified and/or re-aged with an outstanding receivable balance of $18 million at June 30, 2009.
(6)	Prior to July 2008, for Consumer Lending customers receipt of one qualifying payment was required before an account would be re-aged. Beginning in July 2008, receipt of two qualifying payments was required before an account would be re-aged.

	June 30, 2009	March 31, 2009	June 30, 2008
	(dollars are in millions)
Never re-aged	65.0%	67.9%	79.9%
Re-aged:
Re-aged in the last 6 months	14.0	13.6	8.7
Re-aged in the last 7-12 months	10.6	9.6	6.0
Previously re-aged beyond 12 months	10.4	8.9	5.4
Total ever re-aged(2)	35.0	32.1	20.1
Total	100.0%	100.0%	100.0%
Total Re-aged by Product(1)(3)
Real estate secured(2)	$ 27,513	$ 26,143	$ 20,031
Auto finance	2,275	2,387	2,219
Credit card	531	529	804
Private label	-	-	22
Personal non-credit card	4,367	4,446	4,203
Total	$ 34,686	$ 33,505	$ 27,279
(As a percent of receivables and receivables held for sale)
Real estate secured	41.0%	37.5%	25.5%
Auto finance	39.0	36.1	17.7
Credit card	4.2	3.9	2.9
Private label	-	-	22.2
Personal non-credit card	32.0	30.1	25.2
Total(2)	35.0%	32.1%	20.1%

(1)	Excludes commercial and other.
(2)	The Mortgage Services and Consumer Lending businesses real estate secured re-ages are as shown in the following table:

	June 30, 2009	March 31, 2009	June 30, 2008
	(in millions)
Mortgage Services	$ 11,502	$ 11,144	$ 8,870
Consumer Lending	16,011	14,999	11,161
Total real estate secured	$ 27,513	$ 26,143	$ 20,031

(3)	The outstanding receivable balance included in the Re-age Table reflects the principal amount outstanding on the loan net of unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans.

	Percentage of Portfolio Receivables			Percent of Total Receivables	Unemployment Rates as of June 30, 2009(1)
	Credit Cards	Real Estate Secured	Other
California	12%	11%	8%	11%	11.6%
Florida	7	7	6	7	10.6
New York	7	6	6	6	8.7
Ohio	4	5	5	5	11.1
Pennsylvania	4	6	6	5	8.3

(1)	The  U.S.  national unemployment rate as of June 30, 2009 was 9.5 percent.

	June 30, 2009	December 31, 2008
	(in billions)
Debt issued to HSBC subsidiaries:
Term debt	$ 11.0	$ 13.2
Preferred securities issued by Household Capital Trust VIII to HSBC	-	.3
Total debt outstanding to HSBC subsidiaries	11.0	13.5
Debt outstanding to HSBC clients:
Euro commercial paper	.7	.4
Term debt	.3	.5
Total debt outstanding to HSBC clients	1.0	.9
Cash received on bulk and subsequent sales of credit card receivables to HSBC Bank  USA , net (cumulative)	11.1	-
Cash received on bulk sales of auto finance receivables to HSBC Bank  USA , net (cumulative)	2.6	-
Cash received on bulk and subsequent sales of private label credit card receivables to HSBC Bank  USA , net (cumulative)	17.3	19.3
Real estate secured receivable activity with HSBC Bank  USA :
Cash received on sales (cumulative)	3.7	3.7
Direct purchases from correspondents (cumulative)	4.2	4.2
Reductions in real estate secured receivables sold to HSBC Bank  USA	(6.0)	(5.8)
Total real estate secured receivable activity with HSBC Bank  USA	1.9	2.1
Cash received from sale of U.K. Operations to HOHU	.4	.4
Cash received from sale of Canadian Operations to HSBC Bank  Canada	.3	.3
Cash received from sale of  U.K.  credit card business to HBEU	2.7	2.7
Capital contribution by HSBC Investments ( North America ) Inc. (cumulative)	8.2	5.9
Total HSBC related funding	$ 56.5	$ 45.1

Six Months Ended June 30,	2009	2008
	(in millions)
Long-term debt issued	$ 1,600	$ 2,293
Long-term debt retired(1)	(13,017)	(13,629)
Net long term debt retired	$ (11,417)	$ (11,336)

(1)	Additionally, during the six months ended June 30, 2009, long term debt of $6.1 billion was assumed by HSBC Bank  USA  in connection with their purchase of the GM and UP Portfolios, as discussed previously.

	June 30, 2009	December 31, 2008
TETMA + Owned Reserves(1)	21.85%	17.85%
Tangible common equity to tangible managed assets(1)	7.69	6.68
Common and preferred equity to owned assets	9.94	10.27

(1)

TETMA + Owned Reserves and tangible common equity to tangible managed assets represent non-U.S. GAAP financial ratios that are used by HSBC Finance Corporation management and applicable rating agencies to evaluate capital adequacy and may differ from similarly named measures presented by other companies. See "Basis of Reporting" for additional discussion on the use of non-U.S. GAAP financial measures and "Reconciliations to U.S. GAAP Financial Measures" for quantitative reconciliations to the equivalent U.S. GAAP basis financial measure.

	Standard & Poor's Corporation	Moody's Investors Service	Fitch, Inc.
As of June 30, 2009:
HSBC Finance Corporation
Senior debt	A	A3	AA-
Commercial paper	A-1	P-1	F-1+
Series B preferred stock	BBB	Baa2	A+
As of December 31, 2008:
HSBC Finance Corporation
Senior debt	AA-	Aa3	AA-
Commercial paper	A-1+	P-1	F-1+
Series B preferred stock	A-2	A2	A+

Six Months Ended June 30,	2009	2008
	(in millions)
Auto finance	$ -	$ 200
Credit card	-	500
Personal non-credit card	1,600	-
Total	$ 1,600	$ 700

	June 30, 2009	December 31, 2008
	(in billions)
Real estate secured	$ 7.2	$ 7.6
Auto finance	1.7	3.4
Credit card	1.0	10.2
Personal non-credit card	-	.2
Total	$ 9.9	$ 21.4

	June 30, 2009	March 31, 2009	June 30, 2008
	(in billions)
Private label and credit cards(1)	$ 106	$ 116	$ 154
Other consumer lines of credit	1	1	7
Open lines of credit(2)	$ 107	$ 117	$ 161

(1)	These totals include open lines of credit related to private label credit cards and the GM and UP Portfolios which we sell all new receivable originations to HSBC Bank  USA  on a daily basis.
(2)	Includes an estimate for acceptance of credit offers mailed to potential customers prior to June 30, 2009 and December 31, 2008, respectively.

	Actual January 1 through June 30, 2009	Estimated July 1 through December 31, 2009	Estimated Full Year 2009
	(in billions)
Funding needs:
Net asset growth/(attrition)	$ (4)	$(4) - (2)	$(8) - (6)
Commercial paper maturities	10	0 - 1	10 - 11
Term debt maturities	9	7 - 9	16 - 18
Secured financings, including conduit facility maturities	8(2)	2 - 3	10 - 11
Other	(3 )	(1) - 2	(4) - (1)
Total funding needs	$ 20	$4 - 13	$24 - 33
Funding sources:
Commercial paper issuances(1)	$ 3	$1 - 4	$4 - 7
Term debt issuances	0	0 - 1	0 - 1
Asset transfers and loan sales	15(2)	0 - 2	15 - 17
Secured financings, including conduit facility renewals	0	0 - 1	0 - 1
HSBC and HSBC subsidiaries, including capital infusions	2	3 - 5	5 - 7
Total funding sources	$ 20	$4 - 13	$24 - 33

(1)	For the period January 1 through June 30, 2009, domestic and Euro commercial paper outstandings were $5.8 billion offset by $2.6 billion in short-term liquid investments.
(2)	Includes proceeds of $15.0 billion from the sale of credit card and auto finance receivables to HSBC Bank  USA , which included the transfer of approximately $6.1 billion of indebtedness.

	June 30, 2009	December 31, 2008
	(in millions)
Receivables held for sale	$ 645	$ 10,763
Card and Retail Services goodwill	-	2,034

	June 30, 2009	December 31, 2008
	(in millions)
USD	$ .612	$ 2.175
JPY	.243	.221
Absolute PVBP risk	$ .855	$ 2.396

	June 30, 2009	December 31, 2008
	(in millions)
Decrease in net interest income following a hypothetical 25 basis points rise in interest rates applied at the beginning of each quarter over the next 12 months	$ 67	$ 77
Increase in net interest income following a hypothetical 25 basis points fall in interest rates applied at the beginning of each quarter over the next 12 months	70	87

	June 30, 2009	December 31, 2008
	(dollars are in millions)
Tangible common equity:
Common shareholder's equity	$ 9,618	$ 12,862
Exclude:
Fair value option adjustment	(1,731)	(2,494)
Unrealized (gains) losses on cash flow hedging instruments	755	1,316
Postretirement benefit plan adjustments, net of tax	(19)	(4)
Unrealized gains on investments and interest-only strip receivables	19	55
Intangible assets	(827)	(922)
Goodwill	-	(2,294)
Tangible common equity	$ 7,815	$ 8,519
Tangible shareholders' equity:
Tangible common equity	$ 7,815	$ 8,519
Preferred stock	575	575
Mandatorily redeemable preferred securities of Household Capital Trusts	1,000	1,275
Tangible shareholders' equity	$ 9,390	$ 10,369
Tangible shareholder's(s') equity plus owned loss reserves:
Tangible shareholders' equity	$ 9,390	$ 10,369
Credit loss reserves	12,834	12,415
Tangible shareholders' equity plus owned loss reserves	$ 22,224	$ 22,784
Tangible assets:
Total assets	$ 102,518	$ 130,830
Exclude:
Intangible assets	(827)	(922)
Goodwill	-	(2,294)
Derivative financial assets	(1)	(8)
Tangible assets	$ 101,690	$ 127,606
Equity ratios:
Common and preferred equity to owned assets	9.94%	10.27%
Tangible common equity to tangible managed assets	7.69	6.68
Tangible shareholders' equity to tangible managed assets	9.23	8.13
Tangible shareholders' equity plus owned loss reserves to tangible managed assets	21.85	17.85

12	Statement of Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock Dividends
31	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

12	Statement of Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock Dividends
31	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Six Months Ended June 30,	2009	2008
	(dollars are
	in millions)
Loss from continuing operations	$ (5,087)	$ (1,210)
Income tax benefit	660	616
Loss before income tax benefit	(5,747)	(1,826)
Fixed charges:
Interest expense	2,229	3,352
Interest portion of rentals(1)	28	19
Total fixed charges	2,257	3,371
Total earnings (loss) from continuing operations as defined	$ (3,490)	$ 1,545
Ratio of earnings (loss) to fixed charges	(1.55)	.46
Preferred stock dividends(2)	28	29
Ratio of earnings (loss) to combined fixed charges and preferred stock dividends	(1.53)	.45

(1)	Represents one-third of rentals, which approximates the portion representing interest.
(2)	Preferred stock dividends are grossed up to their pretax equivalents.

s/  

NIALL S.K. BOOKER

Niall S.K. Booker

Chief Executive Officer

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HSBC Holdings plc

                                                                                                       By:       

                                                                                                                          Name: P A Stafford

                                                                                                                                            Title: Assistant Group Secretary

                                                                                                                                                                                                         Date:  03 August, 2009