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Business Segments
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Business Segments
Business Segments
 
We have one reportable segment: Consumer. Our Consumer segment consists of our run-off Consumer Lending and Mortgage Services businesses. While these businesses are operating in run-off, they do not qualify to be reported as discontinued operations. There have been no changes in measurement or composition of our segment reporting as compared with the presentation in our 2015 Form 10-K.
Our segment results are presented in accordance with the Group Reporting Basis which apply IFRSs as issued by the IASB and endorsed by the EU, and, as a result, our segment results are prepared and presented using financial information prepared on the Group Reporting Basis as operating results are monitored and reviewed, trends are evaluated and decisions about allocating resources such as employees are primarily made on this basis. However, we continue to monitor liquidity, capital adequacy and report to regulatory agencies on a U.S. GAAP basis.
We continue to review the financial information used to manage our businesses, including the scope and content of the U.S. GAAP financial data being reported to our Management and our Board. To the extent we make changes to this reporting, we will evaluate any impact such changes may have on our segment reporting.
A summary of differences between U.S. GAAP and the Group Reporting Basis as they impact our results are presented in Note 18, "Business Segments," in our 2015 Form 10-K. There have been no significant changes since December 31, 2015 in the differences between U.S. GAAP and the Group Reporting Basis impacting our results.


The following table reconciles our segment results on the Group Reporting Basis to the U.S. GAAP consolidated totals:
 
Group Reporting Basis
Consumer Segment
Totals
 
Group Reporting Basis
Adjustments(1)
 
Group
 Reporting Basis
Reclassifications(2)
 
U.S. GAAP
Consolidated
Totals
 
(in millions)
Three Months Ended September 30, 2016:
 
 
 
 
 
 
 
Net interest income
$
139

 
$
(24
)
 
$
(6
)
 
$
109

Other operating income (Total other revenues)
(113
)
 
95

 
7

 
(11
)
Total operating income (loss)
26

 
71

 
1

 
98

Loan impairment charges (Provision for credit losses)
14

 
558

 
—

 
572

Net interest income and other operating income less loan impairment charges
12

 
(487
)
 
1

 
(474
)
Operating expenses
141

 
(7
)
 
1

 
135

Profit (loss) before tax
$
(129
)
 
$
(480
)
 
$
—

 
$
(609
)
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2015:
 
 
 
 
 
 
 
Net interest income
$
252

 
$
(31
)
 
$
(39
)
 
$
182

Other operating income (Total other revenues)
(60
)
 
(80
)
 
42

 
(98
)
Total operating income (loss)
192

 
(111
)
 
3

 
84

Loan impairment charges (Provision for credit losses)
(13
)
 
31

 
—

 
18

Net interest income and other operating income less loan impairment charges
205

 
(142
)
 
3

 
66

Operating expenses
225

 
4

 
3

 
232

Profit (loss) before tax
$
(20
)
 
$
(146
)
 
$
—

 
$
(166
)
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016:
 
 
 
 
 
 
 
Net interest income
$
523

 
$
(66
)
 
$
(26
)
 
$
431

Other operating income (Total other revenues)
(124
)
 
345

 
27

 
248

Total operating income (loss)
399

 
279

 
1

 
679

Loan impairment charges (Provision for credit losses)
113

 
508

 
—

 
621

Net interest income and other operating income less loan impairment charges
286

 
(229
)
 
1

 
58

Operating expenses
986

 
(1
)
 
1

 
986

Profit (loss) before tax
$
(700
)
 
$
(228
)
 
$
—

 
$
(928
)
Balances at end of period:
 
 
 
 
 
 
 
Customer loans (Receivables)
$
10,531

 
$
(10,531
)
 
$
—

 
$
—

Assets
16,406

 
(1,064
)
 
—

 
15,342

 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2015:
 
 
 
 
 
 
 
Net interest income
$
783

 
$
(100
)
 
$
(149
)
 
$
534

Other operating income (Total other revenues)
(11
)
 
(140
)
 
149

 
(2
)
Total operating income (loss)
772

 
(240
)
 
—

 
532

Loan impairment charges (Provision for credit losses)
36

 
201

 
—

 
237

Net interest income and other operating income less loan impairment charges
736

 
(441
)
 
—

 
295

Operating expenses
899

 
3

 
—

 
902

Profit (loss) before tax
$
(163
)
 
$
(444
)
 
$
—

 
$
(607
)
Balances at end of period:
 
 
 
 
 
 
 
Customer loans (Receivables)
$
19,131

 
$
(9,477
)
 
$
(25
)
 
$
9,629

Assets
27,218

 
(1,603
)
 
—

 
25,615


 

(1) 
Group Reporting Basis Adjustments consist of accounting differences between U.S. GAAP and the Group Reporting Basis which have been described in Note 18, "Business Segments," in our 2015 Form 10-K.
(2) 
Represents differences in balance sheet and income statement presentation between U.S. GAAP and the Group Reporting Basis.
During the first quarter of 2016, management identified a calculation error in the loan impairment allowance model for the segment collectively evaluated for impairment. The cumulative impact of this item was an understatement of the loan impairment allowance at March 31, 2016. As a result, loan impairment charges during the nine months ended September 30, 2016 include an adjustment of approximately $100 million representing the cumulative impact of the correction of this error under the Group Reporting Basis of accounting and reporting policies. Loan impairment allowances under U.S. GAAP were unaffected.
Loan impairment charges for the nine months ended September 30, 2016 were also impacted by an out of period adjustment which decreased net charge-offs by $16 million in order to properly reflect charge-offs for receivables which received a partial forgiveness of principal as a result of an account modification in prior periods.