HSBC HSBC Bank Capital Funding (Sterling 2) L.P. (established in Jersey as a limited partnership under the Limited Partnerships (Jersey) Law 1994) £300,000,000 5.862% Non-cumulative Step-up Perpetual Preferred Securities having the benefit of a subordinated guarantee of HSBC Bank plc (incorporated with limited liability under the laws of England and Wales with registered number 14259) Issue Price: £1,000 per Preferred Security The £300,000,000 5.862% Non-cumulative Step-up Perpetual Preferred Securities, (the “Preferred Securities”) each issued for a capital contribution of £1,000 (referred to herein as the “nominal amount”), representing limited partnership interests in HSBC Bank Capital Funding (Sterling 2) L.P., (the “Issuer”), will be issued on 7 April 2004 (the “Issue Date”). The Preferred Securities will entitle investors, subject to certain conditions described herein, to receive non-cumulative cash distributions (“Distributions”) annually in arrear on 7 April in each year until 7 April 2020 and thereafter semi-annually in arrear on 7 April and 7 October in each year. Distributions shall accrue from (and including) the Issue Date to (but excluding) 7 April 2020 at a fixed rate per annum of 5.862% and semi-annually in arrear from (and including) 7 April 2020, at a floating rate per annum equal to the sum of 1.85% and six-month LIBOR for the relevant Distribution Period (as defined herein). The first Distribution will, if payable, be paid on 7 April 2005, and will be calculated in respect of the period from (and including) 7 April 2004 to (but excluding) 7 April 2005. See “Description of the Preferred Securities – Distributions”. The Issuer is a Jersey limited partnership and is not a legal entity separate from its partners. All obligations of the Issuer to make payments in respect of the Preferred Securities are guaranteed on a subordinated basis pursuant to a guarantee dated 7 April 2004 (the “Guarantee”) given by HSBC Bank plc (the “Bank”). See “Description of the Guarantee”. The Preferred Securities are perpetual securities and not subject to any mandatory redemption provisions. The Preferred Securities may be redeemed, at the option of HSBC Bank (General Partner) Limited, a wholly owned Jersey incorporated subsidiary of the Bank, as general partner of the Issuer (the “General Partner”), on 7 April 2020 or on each Distribution Date thereafter, in whole but not in part each at its nominal amount, subject to satisfaction of the Redemption Conditions (each as defined herein). The Preferred Securities are also redeemable, subject to satisfaction of certain conditions, in whole but not in part, at any time following the occurrence of a Tax Event or a Regulatory Event (each as defined herein). Under existing regulations, neither the Issuer nor the Bank nor any of its subsidiaries may redeem or purchase any Preferred Securities unless the Financial Services Authority, or any successor organisation thereto in the United Kingdom (the “FSA”), has given its prior written consent. See “Description of the Preferred Securities – Redemption and Purchase”. These requirements and restrictions do not affect the ability of the Bank and its subsidiaries and affiliates to engage in market-making activities in relation to the Preferred Securities. In the event of the dissolution or winding-up of the Issuer, holders of Preferred Securities will be entitled, subject to satisfaction of certain conditions, to receive a Liquidating Distribution (as defined herein). See “Description of the Preferred Securities – Liquidating Distributions”. Upon the occurrence of a Substitution Event (as defined herein) or, subject to certain conditions, at the option of the General Partner following a Tax Event or Regulatory Event, the Preferred Securities may be substituted by the Substitute Preference Shares (as defined herein). If any Preferred Securities are outstanding on 7 April 2049 and no notice to redeem such Preferred Securities on or before 7 April 2049 has been given, the Preferred Securities will be substituted by the Substitute Preference Shares. See “Description of the Preferred Securities – Substitution by Substitute Preference Shares”. The Preferred Securities are expected to be assigned on issue a rating of “A” by Standard & Poor’s Ratings Services, a Division of The McGraw Hill Companies Inc., “A1” by Moody’s Investors Service Limited and “AA-” by Fitch Ratings. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revisions, suspension or withdrawal at any time by the relevant rating organisation. Application has been made to list the Preferred Securities on the Luxembourg Stock Exchange (the “Luxembourg Stock Exchange”). See “Investment Considerations” for a discussion of certain factors that should be considered by prospective investors. The Preferred Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or any US State Securities Laws. The Preferred Securities are being offered outside the United States by the Managers (as defined in “Subscription and Sale” below) in accordance with Regulation S under the Securities Act (“Regulation S”), and may not be offered or sold within the United States or to, or for the account or benefit of, US persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Preferred Securities will be evidenced by a single global certificate in registered form (the “Global Certificate”) registered in the name of a nominee of, and deposited with, a common depositary for Euroclear Bank, S.A./N.V. as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme, Luxembourg (“Clearstream, Luxembourg”). Definitive certificates evidencing Preferred Securities will only be available in certain limited circumstances. See “Summary of Provisions relating to the Preferred Securities while in Global Form”. HSBC Bank plc Credit Suisse First Boston Goldman Sachs International Landesbank Baden-Württe∆mb∆erg Morgan Stanley RBC Capital Markets Dated: 1 April 2004 The General Partner, acting on behalf of the Issuer, accepts responsibility for the information contained in this Offering Circular (other than the Bank Group Information (as defined below)). To the best of the knowledge and belief of the General Partner (which has taken all reasonable care to ensure that such is the case) the information contained in this Offering Circular is true and accurate in all material respects and is not misleading, the opinions and intentions expressed in this Offering Circular are honestly held and there are no other facts the omission of which makes this Offering Circular as a whole or any such information or the expression of any such opinion or intention misleading. In addition, the Bank accepts responsibility for all information contained in this Offering Circular set out under the sections entitled “Consolidated Capitalisation and Indebtedness of the Bank”, “Description of the Bank”, “Description of the Guarantee”, “Description of the Substitute Preference Shares” and Annex A – HSBC Bank plc 2003 Annual Report and Accounts (together, the “Bank Group Information”). To the best of the knowledge and belief of the Bank (which has taken all reasonable care to ensure that such is the case), the Bank Group Information is in accordance with the facts and does not omit anything likely to affect the import of such information. The term “the Bank Group” has the meaning given in “Description of the Preferred Securities”. Any reference in this Offering Circular to an action taken by the Issuer shall be taken to mean an action taken by the General Partner on behalf of the Issuer. The term “the HSBC Group” means HSBC Holdings plc together with its subsidiary undertakings. Neither the Issuer nor the Bank has authorised the making or provision of any representation or information regarding the Issuer, the Bank or the Preferred Securities other than as contained in this Offering Circular or as approved for such purpose by the Issuer and the Bank. Any such representation or information should not be relied upon as having been authorised by the Issuer, the General Partner, the Bank or the Managers. Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Preferred Securities shall in any circumstances create any implication that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer or the Bank since the date of this Offering Circular. Prospective investors should inform themselves as to the legal requirements and tax consequences within the countries of their residence and domicile for or of the acquisition, holding or disposal by them of Preferred Securities and any foreign exchange restrictions that might be relevant to them. This Offering Circular does not constitute an offer of or an invitation by or on behalf of the Issuer or any of its partners, or the Managers to subscribe for or purchase any of the Preferred Securities. Investors should satisfy themselves that they understand all the risks associated with making investments in the Preferred Securities. If a prospective investor is in any doubt whatsoever as to the risks involved in investing in the Preferred Securities, he should consult his professional advisers. This Offering Circular does not constitute investment advice or a recommendation to