Exhibit 12.02
HSBC USA Inc.
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Dividends
(in millions, except ratios)
Year Ended December 31,
2000 1999 1998 1997 1996
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Excluding interest on deposits
Net income $ 568 $ 464 $ 527 $ 471 $ 380
Applicable income tax expense 340 308 238 193 171
Less undistributed equity earnings 8 4 2 2 2
Fixed charges:
Interest on:
Borrowed funds 445 130 204 197 121
Long-term debt 420 112 96 112 48
One third of rents, net of income from
subleases 22 15 14 14 12
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Total fixed charges 887 257 314 323 181
Earnings before taxes based on income
and fixed charges $1,787 $1,025 $1,077 $ 985 $ 730
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Total fixed charges $ 887 $ 257 $ 314 $ 323 $ 181
Preferred dividends 28 - - 1 6
Ratio of pretax income to income
after applicable income tax expense 1.60 1.66 1.45 1.41 1.45
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Total preferred stock dividend factor 44 - - 2 9
Fixed charges, including preferred stock
dividend factor $ 931 $ 257 $ 314 $ 325 $ 190
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Ratio of earnings to combined fixed charges
and preferred dividends 1.92 3.99 3.43 3.03 3.84
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Including interest on deposits
Total fixed charges, including preferred
stock dividend factor (as above) $ 931 $ 257 $ 314 $ 325 $ 190
Add: Interest on deposits 2,334 853 867 679 481
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Fixed charges, including preferred stock
dividend factor and interest on deposits $3,265 $1,110 $1,181 $1,004 $ 671
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Earnings before taxes based on
income and fixed charges (as above) $1,787 $1,025 $1,077 $ 985 $ 730
Add: Interest on deposits 2,334 853 867 679 481
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Total $4,121 $1,878 $1,944 $1,664 $1,211
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Ratio of earnings to combined fixed charges
and preferred dividends 1.26 1.69 1.65 1.66 1.80
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90