exv12

EXHIBIT 12

HSBC FINANCE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS


											March 29		January 1
	Year Ended			Year Ended		Year Ended		Year Ended			Through		Through
	December 31,			December 31,		December 31,		December 31,			December 31,		March 28,
	2007			2006		2005		2004			2003		2003

	(Successor)			(Successor)		(Successor)		(Successor)			(Successor)		(Predecessor)
	(in millions)

Net income (loss)	$	(4,906	)	$	1,443	$	1,772	$	1,940		$	1,357	$	246
Income taxes		(945	)		844		891		1,000			690		182

Income before income taxes		(5,851	)		2,287		2,663		2,940			2,047		428

Fixed charges:
Interest expense		8,132			7,374		4,832		3,143			2,031		898
Interest portion of rentals⁽¹⁾		69			59		61		54			40		18

Total fixed charges		8,201			7,433		4,893		3,197			2,071		916

Total earnings as defined	$	2,350		$	9,720	$	7,556	$	6,137		$	4,118	$	1,344
Ratio of earnings to fixed charges		.29			1.31		1.54		1.92	⁽³⁾		1.99		1.47	⁽⁴⁾

Preferred stock dividends⁽²⁾		58			58		125		108			86		32

Ratio of earnings to combined fixed charges and preferred stock dividends		.28			1.30		1.51		1.86	⁽³⁾		1.91		1.42	⁽⁴⁾


⁽¹⁾		Represents one-third of rentals, which approximates the portion representing interest.

⁽²⁾		Preferred stock dividends are grossed up to their pretax equivalents.

⁽³⁾		The 2004 ratios have been negatively impacted by $121 million (after-tax) from the adoption of FFIEC charge-off policies for our domestic private label (excluding retail sales contracts at our consumer lending business) and credit card portfolios in December 2004 and positively impacted by the $423 million (after-tax) gain on the bulk sale of our domestic private label receivables (excluding retail sales contracts at our consumer lending business) to HSBC Bank USA in December 2004. Excluding these items, our ratio of earnings to fixed charges would have been 1.83 percent and our ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.77 percent. These non-U.S. GAAP financial ratios are provided for comparison of our operating trends only.

⁽⁴⁾		The 2003 ratios have been negatively impacted by the $167 million (after-tax) of HSBC acquisition related costs and other merger related items incurred by HSBC Finance Corporation. Excluding these charges, our ratio of earnings to fixed charges would have been 1.69 percent and our ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.63 percent. These non-U.S. GAAP financial ratios are provided for comparison of our operating trends only.