HSBC Bank USA, N.A. Trade and Supply Chain

1. HSBC Bank USA, N.A. Trade and Supply Chain Trade & Supply Chain May 2010

2. Global Macro Trends • Emerging markets are growing faster than developed markets • In Q1 manufacturing and services output in emerging markets rose at fastest rate since Q4 2007 • Manufacturing sector reported the largest quarterly rise in output since data was first available in Q2 2004 • Employment shows largest increase since Q4 2007 • Sales buoyed by rising exports, which showed the largest quarterly increase since Q2 2004. • HSBC expects Chinese GDP to expand at a rate of 9.5% in 2010 after an 8.5% gain in 2009 – despite drop in U.S. consumer demand • Emerging market growth impacting commodity prices • Chinese demand for commodities and other goods has kept prices high • Elevated commodity prices will continue to bolster the export earnings of emerging nations, supporting intra-regional trade within the emerging world • Economic recovery across emerging nations accompanied by a return of pricing pressures, particularly for raw materials *Source HSBC Emerging Markets Index Q4 2009 and Q1 2010

3. Global Macro Trends • Economic recovery worldwide beginning to materialize in Q1 2010 • All nations, both developed and emerging, have seen a robust manufacturing response in recent quarters, reflecting an end to destocking and a synchronized recovery in world trade • U.S. sales rose 1.6% in March from the prior month • Retail sales have increased 8.2% in the past year • World trade grows faster than GDP • Historically World Trade has grown at a faster pace than GDP • Although world trade declined during the 2007-9 global economic crisis, we anticipate that trade will recover quickly when GDP growth returns *Source HSBC Emerging Markets Index Q4 2009 and Emerging Markets Index Q1 2010 and U.S. Department of Commerce

4. HSBC Trade Confidence Index 1H 2010 – global overview Note: (1) The Global index is the unweighted average of the 17 markets listed above in 1H10 Trade and the Global Economy • Supplier / Buyer outlook – Cautious optimism in developed markets • Small and medium business conducting cross-border trade report: • Increased optimism about global trade prospects • Increased optimism about the global economy • Confidence that they will have access to adequate credit to finance business growth • Trade continues with a stable focus on risk management throughout the trade cycle • Due diligence on trading partners *Trade Confidence Index – May 2010

5. Outlook on trade volume in the next 6 months % 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 Decrease Significantly Decrease Slightly Maintain Same Level Increase Slightly Increase Significantly U.S. Trade Outlook • Buyer/Supplier Outlook – US Businesses Expect increasing trade volume

6. Latin America 27 (+13) 1H10 (Change from 2H09) Greater China (HKG, PRC, TWN, Macau) 23 (+3) Canada 16 (-10) Southeast Asia 7 (-1) Middle East 5 (+1) ## Western Europe (excl UK) 4 (-6) Rest of Asia 4 (0) ^ UK 3 (/) Australia/ New Zealand 3 (+1) # Central/Eastern Europe (excl Germany) 2 (-3) Sub-Saharan Africa 1 (-2) ^ Germany 1 (/) Don’t Know/Refused 4 (0) U.S Trade Outlook • Emerging markets are most promising regions for growth % Notes: Greater China includes Hong Kong SAR, Mainland China, Taiwan, Macau ^ New code added in 1H10 #Modified from Central/Eastern Europe to Central/Eastern Europe (excl. Germany) in 1H10 ##Modified from Western Europe (Incl. UK) to Western Europe (excl. UK) in 1H10 +Figures with less than 1% mentions are not shown.

7. U.S. Outlook on Supplier Non-Delivery - % 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 Increase Significantly Increase Slightly Maintain Same Level Decrease Slightly Decrease Significantly - % Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know/Refused” responses. 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 2H09 1H10 Increase Significantly Increase Slightly Maintain Same Level Decrease Slightly Decrease Significantly 73 70 14 12 11 8 2 2 1 1 Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know/Refused” responses. U.S. Trade Outlook • Need to mitigate risk still significant U.S. Outlook on Buyer Default

8. U.S. Trade Outlook • Exchange rates an increasing concern % 1H10 (Change from 2H09)

9. Trade and the Global Economy • Trends over the past 12 months • Improving outlook in the economy/marketplace • Continued focus on risk management: • Due diligence on trading partners • Return to traditional trade finance terms and products that provide greater structure and control over transactions • Working with financial providers that have capital strength • Government and non-government agencies have implemented a number of stimulus packages aimed at encouraging cross-border trade

10. Summary • U.S. businesses are cautiously optimistic about trade growth and the global economy, while emerging markets are the most confident • Confident about their need for and their ability to obtain trade financing • Still cautious about buyer defaults and supply non delivery risks • Emerging markets leading trade rebound and global economic recovery and present an enormous opportunity for U.S. exporters and importers • Latin America becoming an increasingly important player for U.S. companies • Increased domestic consumption in emerging markets presents an opportunity for new trade corridors that can benefit both developed and emerging economies • Intra-regional trade will underpin global trade activity including intra-regional trade between U.S. and Canada • Fluctuations in exchange rates and trade regulations represent the biggest barriers to trade • International businesses need to focus on risk mitigation: • FX • Trading partner relationships • Availability of finance

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