ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 13-2764867 | |
(State of incorporation) | (I.R.S. Employer Identification No.) | |
452 Fifth Avenue, New York | 10018 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | Non-accelerated filer | ý | Smaller reporting company | ¨ | ||||
(Do not check if a smaller reporting company) |
HSBC USA Inc. |
Part/Item No. | Page | |
Part I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 1. | ||
Item 5. | ||
Item 6. | ||
HSBC USA Inc. |
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) | |||||||
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Interest income: | |||||||
Loans | $ | 464 | $ | 463 | |||
Securities | 228 | 305 | |||||
Trading assets | 24 | 33 | |||||
Short-term investments | 14 | 26 | |||||
Other | 10 | 11 | |||||
Total interest income | 740 | 838 | |||||
Interest expense: | |||||||
Deposits | 43 | 76 | |||||
Short-term borrowings | 9 | 9 | |||||
Long-term debt | 167 | 154 | |||||
Other | 16 | 12 | |||||
Total interest expense | 235 | 251 | |||||
Net interest income | 505 | 587 | |||||
Provision for credit losses | 21 | — | |||||
Net interest income after provision for credit losses | 484 | 587 | |||||
Other revenues: | |||||||
Credit card fees | 13 | 30 | |||||
Other fees and commissions | 170 | 194 | |||||
Trust income | 32 | 25 | |||||
Trading revenue | 164 | 198 | |||||
Other securities gains, net | 131 | 30 | |||||
Servicing and other fees from HSBC affiliates | 54 | 56 | |||||
Residential mortgage banking revenue | 46 | 25 | |||||
Loss on instruments designated at fair value and related derivatives | (27 | ) | (212 | ) | |||
Other income | 9 | 21 | |||||
Total other revenues | 592 | 367 | |||||
Operating expenses: | |||||||
Salaries and employee benefits | 252 | 280 | |||||
Support services from HSBC affiliates | 324 | 368 | |||||
Occupancy expense, net | 59 | 59 | |||||
Other expenses | 154 | 149 | |||||
Total operating expenses | 789 | 856 | |||||
Income from continuing operations before income tax expense | 287 | 98 | |||||
Income tax expense | 104 | 18 | |||||
Income from continuing operations | 183 | 80 | |||||
Discontinued Operations (Note 2): | |||||||
Income from discontinued operations before income tax expense | — | 241 | |||||
Income tax expense | — | 86 | |||||
Income from discontinued operations | — | 155 | |||||
Net income | $ | 183 | $ | 235 |
HSBC USA Inc. |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) | |||||||
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Net income | $ | 183 | $ | 235 | |||
Net change in unrealized gains (losses), net of tax as applicable on: | |||||||
Securities available-for-sale, not other-than-temporarily impaired | (150 | ) | (127 | ) | |||
Derivatives designated as cash flow hedges | 23 | 37 | |||||
Unrecognized actuarial gains, transition obligation and prior service costs relating to pension and postretirement benefits, net of tax | — | 1 | |||||
Other comprehensive loss, net of tax | (127 | ) | (89 | ) | |||
Comprehensive income | $ | 56 | $ | 146 |
HSBC USA Inc. |
March 31, | December 31, | ||||||
2013 | 2012 | ||||||
(in millions, except share data) | |||||||
Assets(1) | |||||||
Cash and due from banks | $ | 1,238 | $ | 1,359 | |||
Interest bearing deposits with banks | 17,059 | 13,279 | |||||
Securities purchased under agreements to resell | 6,361 | 3,149 | |||||
Trading assets | 34,658 | 35,995 | |||||
Securities available-for-sale | 59,458 | 67,716 | |||||
Securities held-to-maturity (fair value of $1.6 billion and $1.8 billion at March 31, 2013 and December 31, 2012, respectively) | 1,434 | 1,620 | |||||
Loans | 62,932 | 63,258 | |||||
Less – allowance for credit losses | 568 | 647 | |||||
Loans, net | 62,364 | 62,611 | |||||
Loans held for sale (includes $3 million and $465 million designated under fair value option at March 31, 2013 and December 31, 2012, respectively) | 399 | 1,018 | |||||
Properties and equipment, net | 267 | 276 | |||||
Intangible assets, net | 267 | 247 | |||||
Goodwill | 2,228 | 2,228 | |||||
Other assets | 7,277 | 7,069 | |||||
Total assets | $ | 193,010 | $ | 196,567 | |||
Liabilities(1) | |||||||
Debt: | |||||||
Deposits in domestic offices: | |||||||
Noninterest bearing | $ | 30,426 | $ | 31,315 | |||
Interest bearing (includes $8.4 billion and $8.7 billion designated under fair value option at March 31, 2013 and December 31, 2012, respectively) | 65,840 | 66,520 | |||||
Deposits in foreign offices: | |||||||
Noninterest bearing | 1,742 | 1,813 | |||||
Interest bearing | 19,041 | 18,023 | |||||
Total deposits | 117,049 | 117,671 | |||||
Short-term borrowings | 11,802 | 14,933 | |||||
Long-term debt (includes $7.7 billion and $7.3 billion designated under fair value option at March 31, 2013 and December 31, 2012, respectively) | 22,039 | 21,745 | |||||
Total debt | 150,890 | 154,349 | |||||
Trading liabilities | 19,488 | 19,820 | |||||
Interest, taxes and other liabilities | 4,794 | 4,562 | |||||
Total liabilities | 175,172 | 178,731 | |||||
Shareholders' equity | |||||||
Preferred stock | 1,565 | 1,565 | |||||
Common shareholder’s equity: | |||||||
Common stock ($5 par; 150,000,000 shares authorized; 713 shares issued and outstanding at March 31, 2013 and December 31, 2012) | — | — | |||||
Additional paid-in capital | 14,087 | 14,123 | |||||
Retained earnings | 1,528 | 1,363 | |||||
Accumulated other comprehensive income | 658 | 785 | |||||
Total common shareholder’s equity | 16,273 | 16,271 | |||||
Total shareholders’ equity | 17,838 | 17,836 | |||||
Total liabilities and shareholders’ equity | $ | 193,010 | $ | 196,567 |
(1) | The following table summarizes assets and liabilities related to our consolidated variable interest entities (“VIEs”) as of March 31, 2013 and December 31, 2012 which are consolidated on our balance sheet. Assets and liabilities exclude intercompany balances that eliminate in consolidation. |
HSBC USA Inc. |
March 31, | December 31, | ||||||
2013 | 2012 | ||||||
(in millions) | |||||||
Assets | |||||||
Interest bearing deposits with banks | $ | 210 | $ | 216 | |||
Other assets | 514 | 533 | |||||
Total assets | $ | 724 | $ | 749 | |||
Liabilities | |||||||
Long-term debt | $ | 92 | $ | 92 | |||
Interest, taxes and other liabilities | 125 | 152 | |||||
Total liabilities | $ | 217 | $ | 244 |
HSBC USA Inc. |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) | |||||||
Three Months Ended March 31, | 2013 | 2012 | |||||
(dollars are in millions) | |||||||
Preferred stock | |||||||
Balance at beginning and end of period | $ | 1,565 | $ | 1,565 | |||
Common stock | |||||||
Balance at beginning and end of period | — | — | |||||
Additional paid-in capital | |||||||
Balance at beginning of period | 14,123 | 13,814 | |||||
Other | (36 | ) | (1 | ) | |||
Balance at end of period | 14,087 | 13,813 | |||||
Retained earnings | |||||||
Balance at beginning of period | 1,363 | 2,481 | |||||
Net income | 183 | 235 | |||||
Cash dividends declared on preferred stock | (18 | ) | (19 | ) | |||
Balance at end of period | 1,528 | 2,697 | |||||
Accumulated other comprehensive income | |||||||
Balance at beginning of period | 785 | 642 | |||||
Other comprehensive loss, net of tax | (127 | ) | (89 | ) | |||
Balance at end of period | 658 | 553 | |||||
Total common shareholders’ equity | 16,273 | 17,063 | |||||
Total shareholders’ equity | $ | 17,838 | $ | 18,628 |
HSBC USA Inc. |
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | |||||||
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Cash flows from operating activities | |||||||
Net income | $ | 183 | $ | 235 | |||
Income from discontinued operations | — | 155 | |||||
Income from continuing operations | 183 | 80 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 83 | 51 | |||||
Provision for credit losses | 21 | — | |||||
Realized gains on securities available-for-sale | (123 | ) | (30 | ) | |||
Realized gains on securities held-to-maturity | (8 | ) | — | ||||
Net change in other assets and liabilities | 410 | 31 | |||||
Net change in loans held for sale: | |||||||
Originations of loans | (639 | ) | (675 | ) | |||
Sales and collection of loans held for sale | 804 | 816 | |||||
Net change in trading assets and liabilities | 979 | 6,689 | |||||
Lower of amortized cost or fair value adjustments on loans held for sale | (8 | ) | 10 | ||||
Mark-to-market loss on financial instruments designated at fair value and related derivatives | 27 | 212 | |||||
Cash provided by operating activities – continuing operations | 1,729 | 7,184 | |||||
Cash provided by operating activities – discontinued operations | — | 489 | |||||
Net cash provided by operating activities | 1,729 | 7,673 | |||||
Cash flows from investing activities | |||||||
Net change in interest bearing deposits with banks | (3,780 | ) | 2,416 | ||||
Net change in federal funds sold and securities purchased under agreements to resell | (3,212 | ) | (5,330 | ) | |||
Securities available-for-sale: | |||||||
Purchases of securities available-for-sale | (6,357 | ) | (9,575 | ) | |||
Proceeds from sales of securities available-for-sale | 12,378 | 4,392 | |||||
Proceeds from maturities of securities available-for-sale | 1,909 | 4,409 | |||||
Securities held-to-maturity: | |||||||
Proceeds from sales of securities held-to-maturity | 79 | — | |||||
Proceeds from maturities of securities held-to-maturity | 116 | 86 | |||||
Change in loans: | |||||||
Originations, net of collections | 697 | (1,704 | ) | ||||
Loans sold to third parties | — | 48 | |||||
Net cash used for acquisitions of properties and equipment | (6 | ) | (1 | ) | |||
Other, net | (31 | ) | (79 | ) | |||
Cash provided by (used in) investing activities – continuing operations | 1,793 | (5,338 | ) | ||||
Cash provided by investing activities – discontinued operations | — | 1,407 | |||||
Net cash provide by (used in) investing activities | 1,793 | (3,931 | ) |
HSBC USA Inc. |
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (Continued) | |||||||
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Cash flows from financing activities | |||||||
Net change in deposits | (716 | ) | (2,340 | ) | |||
Debt: | |||||||
Net change in short-term borrowings | (3,131 | ) | (4,018 | ) | |||
Issuance of long-term debt | 1,965 | 3,436 | |||||
Repayment of long-term debt | (1,707 | ) | (839 | ) | |||
Repayment of debt related to the sale and leaseback of 452 Fifth Avenue property | — | (9 | ) | ||||
Other decreases in capital surplus | (36 | ) | (1 | ) | |||
Dividends paid | (18 | ) | (19 | ) | |||
Cash used in financing activities – continuing operations | (3,643 | ) | (3,790 | ) | |||
Cash provided by financing activities – discontinued operations | — | 5 | |||||
Net cash used in financing activities | (3,643 | ) | (3,785 | ) | |||
Net change in cash and due from banks | (121 | ) | (43 | ) | |||
Cash and due from banks at beginning of period | 1,359 | 1,616 | |||||
Cash and due from banks at end of period | $ | 1,238 | $ | 1,573 | |||
Supplemental disclosure of non-cash investing activities | |||||||
Trading securities pending settlement | $ | (26 | ) | $ | 18 | ||
Transfer of loans to held for sale | 41 | 138 |
HSBC USA Inc. |
Note | Page | Note | Page | |||
1 | 12 | |||||
2 | 13 | |||||
3 | 14 | |||||
4 | 15 | |||||
5 | 16 | |||||
6 | 17 | |||||
7 | 18 | |||||
8 | 19 | |||||
9 | 20 | |||||
10 | 21 | |||||
11 | 22 | |||||
23 |
1. | Organization |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Net interest income and other revenues (1) | $ | — | $ | 412 | |||
Income from discontinued operations before income tax | — | 241 |
(1) | Interest expense in 2012 was allocated to discontinued operations in accordance with our existing internal transfer pricing policy. This policy uses match funding based on the expected lives of the assets and liabilities of the business at the time of origination, subject to periodic review, as demonstrated by the expected cash flows and re-pricing characteristics of the underlying assets. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Trading assets: | |||||||
U.S. Treasury | $ | 1,234 | $ | 2,484 | |||
U.S. Government agency | 330 | 337 | |||||
U.S. Government sponsored enterprises(1) | 87 | 32 | |||||
Asset backed securities | 704 | 687 | |||||
Corporate and foreign bonds(2) | 8,043 | 9,583 | |||||
Other securities | 33 | 36 | |||||
Precious metals | 15,875 | 12,332 | |||||
Derivatives | 8,352 | 10,504 | |||||
$ | 34,658 | $ | 35,995 | ||||
Trading liabilities: | |||||||
Securities sold, not yet purchased | $ | 841 | $ | 207 | |||
Payables for precious metals | 6,186 | 5,767 | |||||
Derivatives | 12,461 | 13,846 | |||||
$ | 19,488 | $ | 19,820 |
(1) | Includes mortgage backed securities of $19 million and $16 million issued or guaranteed by the Federal National Mortgage Association (“FNMA”) and $69 million and $16 million issued or guaranteed by the Federal Home Loan Mortgage Corporation (“FHLMC”) at March 31, 2013 and December 31, 2012, respectively. |
(2) | We did not hold any foreign bonds issued by the governments of Greece, Ireland, Italy, Portugal or Spain at either March 31, 2013 or December 31, 2012. |
HSBC USA Inc. |
March 31, 2013 | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||
(in millions) | |||||||||||||||
Securities available-for-sale: | |||||||||||||||
U.S. Treasury | $ | 26,715 | $ | 475 | $ | (26 | ) | $ | 27,164 | ||||||
U.S. Government sponsored enterprises:(1) | |||||||||||||||
Mortgage-backed securities | 176 | 1 | (2 | ) | 175 | ||||||||||
Direct agency obligations | 4,029 | 374 | (2 | ) | 4,401 | ||||||||||
U.S. Government agency issued or guaranteed: | |||||||||||||||
Mortgage-backed securities | 15,471 | 536 | (8 | ) | 15,999 | ||||||||||
Collateralized mortgage obligations | 4,865 | 130 | (19 | ) | 4,976 | ||||||||||
Direct agency obligations | 1 | — | — | 1 | |||||||||||
Obligations of U.S. states and political subdivisions | 743 | 30 | (3 | ) | 770 | ||||||||||
Asset backed securities collateralized by: | |||||||||||||||
Residential mortgages | 1 | — | — | 1 | |||||||||||
Commercial mortgages | 180 | 5 | — | 185 | |||||||||||
Home equity | 299 | — | (44 | ) | 255 | ||||||||||
Student loans | — | — | — | — | |||||||||||
Other | 102 | — | (17 | ) | 85 | ||||||||||
Corporate and other domestic debt securities | 24 | 2 | — | 26 | |||||||||||
Foreign debt securities(2)(4) | 5,267 | 14 | (33 | ) | 5,248 | ||||||||||
Equity securities | 167 | 5 | — | 172 | |||||||||||
Total available-for-sale securities | $ | 58,040 | $ | 1,572 | $ | (154 | ) | $ | 59,458 | ||||||
Securities held-to-maturity: | |||||||||||||||
U.S. Government sponsored enterprises:(3) | |||||||||||||||
Mortgage-backed securities | $ | 1,035 | $ | 146 | $ | — | $ | 1,181 | |||||||
U.S. Government agency issued or guaranteed: | |||||||||||||||
Mortgage-backed securities | 62 | 11 | — | 73 | |||||||||||
Collateralized mortgage obligations | 261 | 39 | — | 300 | |||||||||||
Obligations of U.S. states and political subdivisions | 37 | 2 | — | 39 | |||||||||||
Asset backed securities collateralized by: | |||||||||||||||
Residential mortgages | 39 | 2 | — | 41 | |||||||||||
Total held-to-maturity securities | $ | 1,434 | $ | 200 | $ | — | $ | 1,634 |
HSBC USA Inc. |
December 31, 2012 | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||
(in millions) | |||||||||||||||
Securities available-for-sale: | |||||||||||||||
U.S. Treasury | $ | 34,800 | $ | 566 | $ | (24 | ) | $ | 35,342 | ||||||
U.S. Government sponsored enterprises:(1) | |||||||||||||||
Mortgage-backed securities | 166 | 1 | (1 | ) | 166 | ||||||||||
Direct agency obligations | 4,039 | 364 | (2 | ) | 4,401 | ||||||||||
U.S. Government agency issued or guaranteed: | |||||||||||||||
Mortgage-backed securities | 15,646 | 674 | (6 | ) | 16,314 | ||||||||||
Collateralized mortgage obligations | 4,315 | 156 | — | 4,471 | |||||||||||
Direct agency obligations | 1 | — | — | 1 | |||||||||||
Obligations of U.S. states and political subdivisions | 877 | 37 | (2 | ) | 912 | ||||||||||
Asset backed securities collateralized by: | |||||||||||||||
Residential mortgages | 1 | — | — | 1 | |||||||||||
Commercial mortgages | 208 | 6 | — | 214 | |||||||||||
Home equity | 310 | — | (52 | ) | 258 | ||||||||||
Student loans | — | — | — | — | |||||||||||
Other | 102 | — | (18 | ) | 84 | ||||||||||
Corporate and other domestic debt securities | 24 | 2 | — | 26 | |||||||||||
Foreign debt securities(2)(4) | 5,385 | 16 | (48 | ) | 5,353 | ||||||||||
Equity securities | 167 | 6 | — | 173 | |||||||||||
Total available-for-sale securities | $ | 66,041 | $ | 1,828 | $ | (153 | ) | $ | 67,716 | ||||||
Securities held-to-maturity: | |||||||||||||||
U.S. Government sponsored enterprises:(3) | |||||||||||||||
Mortgage-backed securities | $ | 1,121 | $ | 148 | $ | — | $ | 1,269 | |||||||
U.S. Government agency issued or guaranteed: | |||||||||||||||
Mortgage-backed securities | 66 | 12 | — | 78 | |||||||||||
Collateralized mortgage obligations | 277 | 42 | — | 319 | |||||||||||
Obligations of U.S. states and political subdivisions | 38 | 3 | — | 41 | |||||||||||
Asset backed securities collateralized by: | |||||||||||||||
Residential mortgages | 118 | 6 | — | 124 | |||||||||||
Total held-to-maturity securities | $ | 1,620 | $ | 211 | $ | — | $ | 1,831 |
(1) | Includes securities at amortized cost of $152 million and $153 million issued or guaranteed by FNMA at March 31, 2013 and December 31, 2012, respectively, and $24 million and $13 million issued or guaranteed by FHLMC at March 31, 2013 and December 31, 2012, respectively. |
(2) | At March 31, 2013 and December 31, 2012, foreign debt securities consisted of $1.4 billion and $1.5 billion, respectively, of securities fully backed by foreign governments. The remainder of foreign debt securities represents foreign bank or corporate debt. |
(3) | Includes securities at amortized cost of $477 million and $507 million issued or guaranteed by FNMA at March 31, 2013 and December 31, 2012, respectively, and $558 million and $614 million issued and guaranteed by FHLMC at March 31, 2013 and December 31, 2012, respectively. |
(4) | We did not hold any foreign debt securities issued by the governments of Greece, Ireland, Italy, Portugal or Spain at March 31, 2013 and December 31, 2012. |
HSBC USA Inc. |
One Year or Less | Greater Than One Year | ||||||||||||||||||||
March 31, 2013 | Number of Securities | Gross Unrealized Losses | Aggregate Fair Value of Investment | Number of Securities | Gross Unrealized Losses | Aggregate Fair Value of Investment | |||||||||||||||
(dollars are in millions) | |||||||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||
U.S. Treasury | 4 | $ | (7 | ) | $ | 686 | 6 | $ | (19 | ) | $ | 568 | |||||||||
U.S. Government sponsored enterprises | 13 | (4 | ) | 468 | 12 | — | 7 | ||||||||||||||
U.S. Government agency issued or guaranteed | 39 | (27 | ) | 2,593 | 1 | — | — | ||||||||||||||
Obligations of U.S. states and political subdivisions | 14 | (3 | ) | 171 | 1 | — | 6 | ||||||||||||||
Asset backed securities | 1 | — | 1 | 15 | (61 | ) | 353 | ||||||||||||||
Foreign debt securities | — | — | — | 9 | (33 | ) | 3,733 | ||||||||||||||
Securities available-for-sale | 71 | $ | (41 | ) | $ | 3,919 | 44 | $ | (113 | ) | $ | 4,667 | |||||||||
Securities held-to-maturity: | |||||||||||||||||||||
U.S. Government sponsored enterprises | 20 | $ | — | $ | — | 48 | $ | — | $ | — | |||||||||||
U.S. Government agency issued or guaranteed | 78 | — | — | 916 | — | 2 | |||||||||||||||
Obligations of U.S. states and political subdivisions | 4 | — | 2 | 2 | — | 1 | |||||||||||||||
Asset backed securities | — | — | — | — | — | — | |||||||||||||||
Securities held-to-maturity | 102 | $ | — | $ | 2 | 966 | $ | — | $ | 3 |
One Year or Less | Greater Than One Year | ||||||||||||||||||||
December 31, 2012 | Number of Securities | Gross Unrealized Losses | Aggregate Fair Value of Investment | Number of Securities | Gross Unrealized Losses | Aggregate Fair Value of Investment | |||||||||||||||
(dollars are in millions) | |||||||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||
U.S. Treasury | 6 | $ | (3 | ) | $ | 3,344 | 6 | $ | (21 | ) | $ | 587 | |||||||||
U.S. Government sponsored enterprises | 9 | (3 | ) | 431 | 14 | — | 7 | ||||||||||||||
U.S. Government agency issued or guaranteed | 18 | (6 | ) | 1,059 | — | — | — | ||||||||||||||
Obligations of U.S. states and political subdivisions | 14 | (2 | ) | 168 | 1 | — | 7 | ||||||||||||||
Asset backed securities | 3 | — | 20 | 13 | (70 | ) | 354 | ||||||||||||||
Foreign debt securities | — | — | — | 9 | (48 | ) | 3,787 | ||||||||||||||
Securities available-for-sale | 50 | $ | (14 | ) | $ | 5,022 | 43 | $ | (139 | ) | $ | 4,742 | |||||||||
Securities held-to-maturity: | |||||||||||||||||||||
U.S. Government sponsored enterprises | 24 | $ | — | $ | — | 52 | $ | — | $ | — | |||||||||||
U.S. Government agency issued or guaranteed | 75 | — | — | 947 | — | 2 | |||||||||||||||
Obligations of U.S. states and political subdivisions | 2 | — | 1 | 1 | — | — | |||||||||||||||
Asset backed securities | 1 | — | 4 | 2 | — | 7 | |||||||||||||||
Securities held-to-maturity | 102 | $ | — | $ | 5 | 1,002 | $ | — | $ | 9 |
HSBC USA Inc. |
• | The recovery of the U.S. economy has been slow; |
• | The continued uncertainty in the U.S. housing markets with high levels of pending foreclosure volume; |
• | A lack of significant traction in government sponsored programs in loan modifications; |
• | A lack of refinancing activities within certain segments of the mortgage market, even at the current low interest rate environment, and the re-default rate for refinanced loans; |
• | The unemployment rate although improving remains high compared to historical levels; |
• | The decline in the occupancy rate in commercial properties; and |
• | The severity and duration of unrealized loss. |
• | The length of time and the extent to which the fair value has been less than the amortized cost basis; |
• | The level of credit enhancement provided by the structure, which includes but is not limited to credit subordination positions, over collateralization, protective triggers and financial guarantees provided by monoline wraps; |
• | Changes in the near term prospects of the issuer or underlying collateral of a security such as changes in default rates, loss severities given default and significant changes in prepayment assumptions; |
• | The level of excess cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities; and |
• | Any adverse change to the credit conditions of the issuer, the monoline insurer or the security such as credit downgrades by the rating agencies. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Gross realized gains | $ | 124 | $ | 70 | |||
Gross realized losses | (1 | ) | (40 | ) | |||
Net realized gains | $ | 123 | $ | 30 |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Gross realized gains | $ | 8 | $ | — | |||
Gross realized losses | — | — | |||||
Net realized gains (losses) | $ | 8 | $ | — |
Within One Year | After One But Within Five Years | After Five But Within Ten Years | After Ten Years | ||||||||||||||||||||||||
Taxable Equivalent Basis | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||
(dollars are in millions) | |||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||
U.S. Treasury | $ | 2,002 | .41 | % | $ | 19,694 | .48 | % | $ | 2,880 | 2.60 | % | $ | 2,139 | 3.57 | % | |||||||||||
U.S. Government sponsored enterprises | 50 | .39 | 333 | 3.26 | 3,000 | 3.05 | 822 | 3.64 | |||||||||||||||||||
U.S. Government agency issued or guaranteed | — | — | 4 | 4.66 | 88 | 1.88 | 20,245 | 2.79 | |||||||||||||||||||
Obligations of U.S. states and political subdivisions | — | — | 49 | 4.20 | 293 | 4.01 | 401 | 3.68 | |||||||||||||||||||
Asset backed securities | — | — | 1 | 1.83 | 11 | .41 | 570 | 2.77 | |||||||||||||||||||
Other domestic debt securities | — | — | — | — | — | — | 24 | 4.00 | |||||||||||||||||||
Foreign debt securities | 665 | 3.48 | 4,602 | 1.87 | — | — | — | — | |||||||||||||||||||
Total amortized cost | $ | 2,717 | 1.16 | % | $ | 24,683 | .79 | % | $ | 6,272 | 2.87 | % | $ | 24,201 | 2.90 | % | |||||||||||
Total fair value | $ | 2,721 | $ | 24,769 | $ | 6,794 | $ | 25,002 | |||||||||||||||||||
Held-to-maturity: | |||||||||||||||||||||||||||
U.S. Government sponsored enterprises | $ | 1 | 7.98 | % | $ | 5 | 7.68 | % | $ | 1 | 7.89 | % | $ | 1,028 | 6.16 | % | |||||||||||
U.S. Government agency issued or guaranteed | — | — | 1 | 7.59 | 3 | 7.69 | 319 | 6.50 | |||||||||||||||||||
Obligations of U.S. states and political subdivisions | 5 | 5.05 | 14 | 5.13 | 9 | 4.42 | 9 | 5.02 | |||||||||||||||||||
Asset backed securities | — | — | — | — | — | — | 39 | 6.41 | |||||||||||||||||||
Total amortized cost | $ | 6 | 5.57 | % | $ | 20 | 5.87 | % | $ | 13 | 5.41 | % | $ | 1,395 | 6.23 | % | |||||||||||
Total fair value | $ | 6 | $ | 20 | $ | 14 | $ | 1,594 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 8,319 | $ | 8,457 | |||
Business and corporate banking | 12,725 | 12,608 | |||||
Global banking(1) | 19,718 | 20,009 | |||||
Other commercial | 2,877 | 3,076 | |||||
Total commercial | 43,639 | 44,150 | |||||
Consumer loans: | |||||||
Home equity mortgages | 2,236 | 2,324 | |||||
Residential mortgages, excluding home equity mortgages | 15,730 | 15,371 | |||||
Credit cards | 749 | 815 | |||||
Other consumer | 578 | 598 | |||||
Total consumer | 19,293 | 19,108 | |||||
Total loans | $ | 62,932 | $ | 63,258 |
(1) | Represents large multinational firms including globally focused U.S. corporate and financial institutions and USD lending to select high quality Latin American and other multinational customers managed by HSBC on a global basis. |
Days Past Due | |||||||||||||||||||||||
At March 31, 2013 | 1 - 29 days | 30 - 89 days | 90+ days | Total Past Due | Current | Total Loans | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Commercial loans: | |||||||||||||||||||||||
Construction and other real estate | $ | 94 | $ | 31 | $ | 62 | $ | 187 | $ | 8,132 | $ | 8,319 | |||||||||||
Business and corporate banking | 684 | 36 | 42 | 762 | 11,963 | 12,725 | |||||||||||||||||
Global banking | 547 | 17 | 8 | 572 | 19,146 | 19,718 | |||||||||||||||||
Other commercial | 343 | 28 | 19 | 390 | 2,487 | 2,877 | |||||||||||||||||
Total commercial | 1,668 | 112 | 131 | 1,911 | 41,728 | 43,639 | |||||||||||||||||
Consumer loans: | |||||||||||||||||||||||
Home equity mortgages | 338 | 34 | 69 | 441 | 1,795 | 2,236 | |||||||||||||||||
Residential mortgages, excluding home equity mortgages | 85 | 448 | 931 | 1,464 | 14,266 | 15,730 | |||||||||||||||||
Credit cards | 22 | 12 | 13 | 47 | 702 | 749 | |||||||||||||||||
Other consumer | 5 | 3 | 27 | 35 | 543 | 578 | |||||||||||||||||
Total consumer | 450 | 497 | 1,040 | 1,987 | 17,306 | 19,293 | |||||||||||||||||
Total loans | $ | 2,118 | $ | 609 | $ | 1,171 | $ | 3,898 | $ | 59,034 | 62,932 |
HSBC USA Inc. |
Days Past Due | |||||||||||||||||||||||
At December 31, 2012 | 1 - 29 days | 30 - 89 days | 90+ days | Total Past Due | Current | Total Loans | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Commercial loans: | |||||||||||||||||||||||
Construction and other real estate | $ | 27 | $ | 89 | $ | 152 | $ | 268 | $ | 8,189 | $ | 8,457 | |||||||||||
Business and corporate banking | 558 | 73 | 70 | 701 | 11,907 | 12,608 | |||||||||||||||||
Global banking | 777 | 30 | 8 | 815 | 19,194 | 20,009 | |||||||||||||||||
Other commercial | 37 | 16 | 31 | 84 | 2,992 | 3,076 | |||||||||||||||||
Total commercial | 1,399 | 208 | 261 | 1,868 | 42,282 | 44,150 | |||||||||||||||||
Consumer loans: | |||||||||||||||||||||||
Home equity mortgages | 348 | 40 | 82 | 470 | 1,854 | 2,324 | |||||||||||||||||
Residential mortgages, excluding home equity mortgages | 100 | 493 | 976 | 1,569 | 13,802 | 15,371 | |||||||||||||||||
Credit cards | 28 | 14 | 15 | 57 | 758 | 815 | |||||||||||||||||
Other consumer | 7 | 5 | 33 | 45 | 553 | 598 | |||||||||||||||||
Total consumer | 483 | 552 | 1,106 | 2,141 | 16,967 | 19,108 | |||||||||||||||||
Total loans | $ | 1,882 | $ | 760 | $ | 1,367 | $ | 4,009 | $ | 59,249 | $ | 63,258 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Nonaccrual loans: | |||||||
Commercial: | |||||||
Real Estate: | |||||||
Construction and land loans | $ | 47 | $ | 104 | |||
Other real estate | 218 | 281 | |||||
Business and corporate banking | 30 | 47 | |||||
Global banking | 18 | 18 | |||||
Other commercial | 14 | 13 | |||||
Total commercial | 327 | 463 | |||||
Consumer: | |||||||
Residential mortgages, excluding home equity mortgages | 1,026 | 1,038 | |||||
Home equity mortgages | 74 | 86 | |||||
Total residential mortgages(1) | 1,100 | 1,124 | |||||
Other consumer loans | 5 | 5 | |||||
Total consumer loans | 1,105 | 1,129 | |||||
Nonaccrual loans held for sale | 34 | 37 | |||||
Total nonaccruing loans | 1,466 | 1,629 | |||||
Accruing loans contractually past due 90 days or more: | |||||||
Commercial: | |||||||
Real Estate: | |||||||
Construction and land loans | — | — | |||||
Other real estate | 2 | 8 | |||||
Business and corporate banking | 2 | 28 | |||||
Other commercial | 1 | 1 | |||||
Total commercial | 5 | 37 | |||||
Consumer: | |||||||
Credit card receivables | 13 | 15 | |||||
Other consumer | 22 | 28 | |||||
Total consumer loans | 35 | 43 | |||||
Total accruing loans contractually past due 90 days or more | 40 | 80 | |||||
Total nonperforming loans | $ | 1,506 | $ | 1,709 |
(1) | Nonaccrual residential mortgages includes all receivables which are 90 or more days contractually delinquent as well as second lien loans where the first lien loan that we own or service is 90 or more days contractually delinquent. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | — | $ | 73 | |||
Business and corporate banking | 4 | 22 | |||||
Total commercial | 4 | 95 | |||||
Consumer loans: | |||||||
Residential mortgages | 44 | 55 | |||||
Credit cards | — | 1 | |||||
Total consumer | 44 | 56 | |||||
Total | $ | 48 | $ | 151 |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
TDR Loans(1)(2): | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 297 | $ | 343 | |||
Business and corporate banking | 34 | 86 | |||||
Other commercial | 30 | 31 | |||||
Total commercial | 361 | 460 | |||||
Consumer loans: | |||||||
Residential mortgages (3) | 869 | 960 | |||||
Credit cards | 13 | 14 | |||||
Total consumer | 882 | 974 | |||||
Total TDR Loans(4) | $ | 1,243 | $ | 1,434 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Allowance for credit losses for TDR Loans(5): | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 21 | $ | 23 | |||
Business and corporate banking | 2 | 3 | |||||
Other commercial | — | — | |||||
Total commercial | 23 | 26 | |||||
Consumer loans: | |||||||
Residential mortgages | 80 | 109 | |||||
Credit cards | 5 | 5 | |||||
Total consumer | 85 | 114 | |||||
Total allowance for credit losses for TDR Loans | $ | 108 | $ | 140 |
(1) | TDR Loans are considered to be impaired loans. For consumer loans, all such loans are considered impaired loans regardless of accrual status. For commercial loans, impaired loans include other loans in addition to TDRs which totaled $171 million and $237 million at March 31, 2013 and December 31, 2012, respectively. |
(2) | The TDR Loan balances included in the table above reflect the current carrying amount of TDR Loans and includes all basis adjustments on the loan, such as unearned income, unamortized deferred fees and costs on originated loans, partial charge-offs and premiums or discounts on purchased loans. The following table reflects the unpaid principal balance of TDR Loans: |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 318 | $ | 398 | |||
Business and corporate banking | 73 | 137 | |||||
Other commercial | 33 | 34 | |||||
Total commercial | 424 | 569 | |||||
Consumer loans: | |||||||
Residential mortgages | 1,029 | 1,118 | |||||
Credit cards | 13 | 14 | |||||
Total consumer | 1,042 | 1,132 | |||||
Total | $ | 1,466 | $ | 1,701 |
(3) | Includes $632 million and $445 million at March 31, 2013 and December 31, 2012, respectively, of loans that are recorded at the lower of amortized cost or fair value of the collateral less cost to sell. |
(4) | Includes balances of $416 million and $519 million at March 31, 2013 and December 31, 2012, respectively, which are classified as nonaccrual loans. |
(5) | Included in the allowance for credit losses. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Average balance of TDR Loans | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 320 | $ | 355 | |||
Business and corporate banking | 60 | 100 | |||||
Other commercial | 31 | 36 | |||||
Total commercial | 411 | 491 | |||||
Consumer loans: | |||||||
Residential mortgages | 849 | 638 | |||||
Credit cards | 14 | 20 | |||||
Total consumer | 863 | 658 | |||||
Total average balance of TDR Loans | $ | 1,274 | $ | 1,149 | |||
Interest income recognized on TDR Loans | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 2 | $ | 2 | |||
Business and corporate banking | — | — | |||||
Other commercial | 1 | 1 | |||||
Total commercial | 3 | 3 | |||||
Consumer loans: | |||||||
Residential mortgages | 8 | 6 | |||||
Credit cards | — | — | |||||
Total consumer | 8 | 6 | |||||
Total interest income recognized on TDR Loans | $ | 11 | $ | 9 |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Commercial loans: | |||||||
Construction and other real estate | $ | 2 | $ | — | |||
Business and corporate banking | — | — | |||||
Other commercial | — | — | |||||
Total commercial | 2 | — | |||||
Consumer loans: | |||||||
Residential mortgages | 13 | 19 | |||||
Credit cards | 1 | 1 | |||||
Total consumer | 14 | 20 | |||||
Total | $ | 16 | $ | 20 |
HSBC USA Inc. |
Amount with Impairment Reserves | Amount without Impairment Reserves | Total Impaired Commercial Loans(1)(2)(3) | Impairment Reserve | ||||||||||||
(in millions) | |||||||||||||||
At March 31, 2013 | |||||||||||||||
Construction and other real estate | $ | 101 | $ | 292 | $ | 393 | $ | 27 | |||||||
Business and corporate banking | 20 | 27 | 47 | 8 | |||||||||||
Global banking | — | 18 | 18 | — | |||||||||||
Other commercial | 10 | 64 | 74 | — | |||||||||||
Total | $ | 131 | $ | 401 | $ | 532 | $ | 35 | |||||||
At December 31, 2012 | |||||||||||||||
Construction and other real estate | $ | 192 | $ | 305 | $ | 497 | $ | 86 | |||||||
Business and corporate banking | 57 | 49 | 106 | 10 | |||||||||||
Global banking | — | 18 | 18 | — | |||||||||||
Other commercial | 1 | 75 | 76 | — | |||||||||||
Total | $ | 250 | $ | 447 | $ | 697 | $ | 96 |
(1) | The reduction in impaired commercial loans for construction and other real estate loans primarily relates to the charge-off of a single loan totaling $57 million in the first quarter of 2013 for which we were fully reserved. |
(2) | Includes impaired commercial loans which are also considered TDR Loans as follows: |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Construction and other real estate | $ | 297 | $ | 343 | |||
Business and corporate banking | 34 | 86 | |||||
Other commercial | 30 | 31 | |||||
Total | $ | 361 | $ | 460 |
(3) | The impaired commercial loan balances included in the table above reflect the current carrying amount of the loan and includes all basis adjustments, such as unamortized deferred fees and costs on originated loans and any premiums or discounts. The unpaid principal balance of impaired commercial loans included in the table above are as follows: |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Construction and other real estate | $ | 414 | $ | 552 | |||
Business and corporate banking | 86 | 157 | |||||
Global banking | 18 | 18 | |||||
Other commercial | 77 | 79 | |||||
Total | $ | 595 | $ | 806 |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Average balance of impaired commercial loans: | |||||||
Construction and other real estate | $ | 445 | $ | 694 | |||
Business and corporate banking | 77 | 133 | |||||
Global banking | 18 | 78 | |||||
Other commercial | 75 | 90 | |||||
Total average balance of impaired commercial loans | $ | 615 | $ | 995 | |||
Interest income recognized on impaired commercial loans: | |||||||
Construction and other real estate | $ | 1 | $ | 1 | |||
Business and corporate banking | — | 1 | |||||
Global banking | — | — | |||||
Other commercial | — | — | |||||
Total interest income recognized on impaired commercial loans | $ | 1 | $ | 2 |
Special Mention | Substandard | Doubtful | Total | ||||||||||||
(in millions) | |||||||||||||||
At March 31, 2013 | |||||||||||||||
Construction and other real estate | $ | 510 | $ | 611 | $ | 28 | $ | 1,149 | |||||||
Business and corporate banking | 363 | 81 | 9 | 453 | |||||||||||
Global banking | 242 | 50 | — | 292 | |||||||||||
Other commercial | 29 | 68 | 3 | 100 | |||||||||||
Total | $ | 1,144 | $ | 810 | $ | 40 | $ | 1,994 | |||||||
At December 31, 2012 | |||||||||||||||
Construction and other real estate | $ | 627 | $ | 677 | $ | 105 | $ | 1,409 | |||||||
Business and corporate banking | 369 | 115 | 10 | 494 | |||||||||||
Global banking | 93 | 50 | — | 143 | |||||||||||
Other commercial | 36 | 74 | 2 | 112 | |||||||||||
Total | $ | 1,125 | $ | 916 | $ | 117 | $ | 2,158 |
HSBC USA Inc. |
Performing Loans | Nonaccrual Loans | Accruing Loans Contractually Past Due 90 days or More | Total | ||||||||||||
(in millions) | |||||||||||||||
At March 31, 2013 | |||||||||||||||
Commercial: | |||||||||||||||
Construction and other real estate | $ | 8,052 | $ | 265 | $ | 2 | $ | 8,319 | |||||||
Business and corporate banking | 12,693 | 30 | 2 | 12,725 | |||||||||||
Global banking | 19,700 | 18 | — | 19,718 | |||||||||||
Other commercial | 2,862 | 14 | 1 | 2,877 | |||||||||||
Total commercial | $ | 43,307 | $ | 327 | $ | 5 | $ | 43,639 | |||||||
At December 31, 2012 | |||||||||||||||
Commercial: | |||||||||||||||
Construction and other real estate | $ | 8,064 | $ | 385 | $ | 8 | $ | 8,457 | |||||||
Business and corporate banking | 12,533 | 47 | 28 | 12,608 | |||||||||||
Global banking | 19,991 | 18 | — | 20,009 | |||||||||||
Other commercial | 3,062 | 13 | 1 | 3,076 | |||||||||||
Total commercial | $ | 43,650 | $ | 463 | $ | 37 | $ | 44,150 |
Investment Grade(1) | Non-Investment Grade | Total | |||||||||
(in millions) | |||||||||||
At March 31, 2013 | |||||||||||
Construction and other real estate | $ | 3,492 | $ | 4,827 | $ | 8,319 | |||||
Business and corporate banking | 6,098 | 6,627 | 12,725 | ||||||||
Global banking | 16,472 | 3,246 | 19,718 | ||||||||
Other commercial | 1,142 | 1,735 | 2,877 | ||||||||
Total commercial | $ | 27,204 | $ | 16,435 | $ | 43,639 | |||||
At December 31, 2012 | |||||||||||
Construction and other real estate | $ | 4,727 | $ | 3,730 | $ | 8,457 | |||||
Business and corporate banking | 6,012 | 6,596 | 12,608 | ||||||||
Global banking | 16,206 | 3,803 | 20,009 | ||||||||
Other commercial | 1,253 | 1,823 | 3,076 | ||||||||
Total commercial | $ | 28,198 | $ | 15,952 | $ | 44,150 |
(1) | Investment grade includes commercial loans with credit ratings of at least BBB- or above or the equivalent based on our internal credit rating system. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||||
Delinquent Loans | Delinquency Ratio | Delinquent Loans | Delinquency Ratio | ||||||||||
(dollars are in millions) | |||||||||||||
Consumer: | |||||||||||||
Residential mortgage, excluding home equity mortgages(1) | $ | 1,158 | 7.23 | % | $ | 1,233 | 7.78 | % | |||||
Home equity mortgages | 85 | 3.80 | 75 | 3.23 | |||||||||
Total residential mortgages | 1,243 | 6.81 | 1,308 | 7.20 | |||||||||
Credit card receivables | 18 | 2.40 | 21 | 2.58 | |||||||||
Other consumer | 24 | 3.74 | 30 | 4.52 | |||||||||
Total consumer | $ | 1,285 | 6.54 | % | $ | 1,359 | 6.92 | % |
(1) | At March 31, 2013 and December 31, 2012, residential mortgage loan delinquency includes $1.1 billion and $1.0 billion, respectively, of loans that are carried at the lower of amortized cost or fair value less cost to sell. |
Performing Loans | Nonaccrual Loans | Accruing Loans Contractually Past Due 90 days or More | Total | ||||||||||||
(in millions) | |||||||||||||||
At March 31, 2013 | |||||||||||||||
Consumer: | |||||||||||||||
Residential mortgage, excluding home equity mortgages | $ | 14,704 | $ | 1,026 | $ | — | $ | 15,730 | |||||||
Home equity mortgages | 2,162 | 74 | — | 2,236 | |||||||||||
Total residential mortgages | 16,866 | 1,100 | — | 17,966 | |||||||||||
Credit card receivables | 736 | — | 13 | 749 | |||||||||||
Other consumer | 551 | 5 | 22 | 578 | |||||||||||
Total consumer | $ | 18,153 | $ | 1,105 | $ | 35 | $ | 19,293 | |||||||
At December 31, 2012 | |||||||||||||||
Consumer: | |||||||||||||||
Residential mortgage, excluding home equity mortgages | $ | 14,333 | $ | 1,038 | $ | — | $ | 15,371 | |||||||
Home equity mortgages | 2,238 | 86 | — | 2,324 | |||||||||||
Total residential mortgages | 16,571 | 1,124 | — | 17,695 | |||||||||||
Credit card receivables | 800 | — | 15 | 815 | |||||||||||
Other consumer | 565 | 5 | 28 | 598 | |||||||||||
Total consumer | $ | 17,936 | $ | 1,129 | $ | 43 | $ | 19,108 |
HSBC USA Inc. |
• | High loan-to-value (“LTV”) loans – Certain residential mortgages on primary residences with LTV ratios equal to or exceeding 90 percent at the time of origination and no mortgage insurance, which could result in the potential inability to recover the entire investment in loans involving foreclosed or damaged properties. |
• | Interest-only loans – A loan which allows a customer to pay the interest-only portion of the monthly payment for a period of time which results in lower payments during the initial loan period. However, subsequent events affecting a customer’s financial position could affect the ability of customers to repay the loan in the future when the principal payments are required. |
• | Adjustable rate mortgage (“ARM”) loans – A loan which allows us to adjust pricing on the loan in line with market movements. A customer’s financial situation and the general interest rate environment at the time of the interest rate reset could affect the customer’s ability to repay or refinance the loan after the adjustment. |
March 31, 2013 | December 31, 2012 | ||||||
(in billions) | |||||||
Residential mortgage loans with high LTV and no mortgage insurance(1) | $ | .9 | $ | .9 | |||
Interest-only residential mortgage loans | 3.9 | 4.0 | |||||
ARM loans(2) | 10.4 | 10.4 |
(1) | Residential mortgage loans with high LTV and no mortgage insurance includes both fixed rate and adjustable rate mortgages. Excludes $19 million and $20 million of subprime residential mortgage loans held for sale at March 31, 2013 and December 31, 2012, respectively. |
(2) | ARM loan balances above exclude $18 million and $19 million of subprime residential mortgage loans held for sale at March 31, 2013 and December 31, 2012, respectively. In 2013 and 2014, approximately $232 million and $327 million, respectively, of the ARM loans will experience their first interest rate reset. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Closed end: | |||||||
First lien | $ | 15,730 | $ | 15,371 | |||
Second lien | 175 | 186 | |||||
Revolving: | |||||||
Second lien | 2,061 | 2,138 | |||||
Total | $ | 17,966 | $ | 17,695 |
Three Months Ended March 31, | 2013 | 2012 | |||||
(In millions) | |||||||
Balance at beginning of period | $ | 647 | $ | 743 | |||
Provision for credit losses | 21 | — | |||||
Charge-offs | (110 | ) | (162 | ) | |||
Recoveries | 10 | 22 | |||||
Balance at end of period | $ | 568 | $ | 603 |
HSBC USA Inc. |
Commercial | Consumer | ||||||||||||||||||||||||||||||||||
Construction and Other Real Estate | Business and Corporate Banking | Global Banking | Other Comm’l | Residential Mortgage, Excl Home Equity Mortgages | Home Equity Mortgages | Credit Card | Other Consumer | Total | |||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||||||||
Allowance for credit losses – beginning of period | $ | 162 | $ | 97 | $ | 41 | $ | 17 | $ | 210 | $ | 45 | $ | 55 | $ | 20 | $ | 647 | |||||||||||||||||
Provision charged to income | 9 | 2 | (1 | ) | — | (3 | ) | 17 | (2 | ) | (1 | ) | 21 | ||||||||||||||||||||||
Charge offs | (58 | ) | (6 | ) | — | — | (16 | ) | (12 | ) | (12 | ) | (6 | ) | (110 | ) | |||||||||||||||||||
Recoveries | 3 | 3 | — | — | 1 | — | 1 | 2 | 10 | ||||||||||||||||||||||||||
Net charge offs | (55 | ) | (3 | ) | — | — | (15 | ) | (12 | ) | (11 | ) | (4 | ) | (100 | ) | |||||||||||||||||||
Allowance for credit losses – end of period | $ | 116 | $ | 96 | $ | 40 | $ | 17 | $ | 192 | $ | 50 | $ | 42 | $ | 15 | $ | 568 | |||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 89 | $ | 88 | $ | 40 | $ | 17 | $ | 115 | $ | 47 | $ | 37 | $ | 15 | $ | 448 | |||||||||||||||||
Ending balance: individually evaluated for impairment | 27 | 8 | — | — | 77 | 3 | 5 | — | 120 | ||||||||||||||||||||||||||
Total allowance for credit losses | $ | 116 | $ | 96 | $ | 40 | $ | 17 | $ | 192 | $ | 50 | $ | 42 | $ | 15 | $ | 568 | |||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | 7,926 | $ | 12,678 | $ | 19,700 | $ | 2,803 | $ | 13,962 | $ | 2,215 | $ | 736 | $ | 578 | $ | 60,598 | |||||||||||||||||
Individually evaluated for impairment(1) | 393 | 47 | 18 | 74 | 216 | 21 | 13 | — | 782 | ||||||||||||||||||||||||||
Loans carried at lower of amortized cost or fair value less cost to sell | — | — | — | — | 1,552 | — | — | — | 1,552 | ||||||||||||||||||||||||||
Total loans | $ | 8,319 | $ | 12,725 | $ | 19,718 | $ | 2,877 | $ | 15,730 | $ | 2,236 | $ | 749 | $ | 578 | $ | 62,932 | |||||||||||||||||
Three Months Ended March 31, 2012 | |||||||||||||||||||||||||||||||||||
Allowance for credit losses – beginning of period | $ | 212 | $ | 78 | $ | 131 | $ | 21 | $ | 192 | $ | 52 | $ | 39 | $ | 18 | $ | 743 | |||||||||||||||||
Provision charged to income | (20 | ) | 6 | (22 | ) | (2 | ) | 15 | 8 | 11 | 4 | — | |||||||||||||||||||||||
Charge offs | (1 | ) | (10 | ) | (84 | ) | — | (26 | ) | (17 | ) | (17 | ) | (7 | ) | (162 | ) | ||||||||||||||||||
Recoveries | 14 | 2 | — | 1 | 1 | — | 2 | 2 | 22 | ||||||||||||||||||||||||||
Net charge offs | 13 | (8 | ) | (84 | ) | 1 | (25 | ) | (17 | ) | (15 | ) | (5 | ) | (140 | ) | |||||||||||||||||||
Allowance for credit losses – end of period | $ | 205 | $ | 76 | $ | 25 | $ | 20 | $ | 182 | $ | 43 | $ | 35 | $ | 17 | $ | 603 | |||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 95 | $ | 64 | $ | 25 | $ | 20 | $ | 95 | $ | 39 | $ | 29 | $ | 17 | $ | 384 | |||||||||||||||||
Ending balance: individually evaluated for impairment | 110 | 12 | — | — | 87 | 4 | 6 | — | 219 | ||||||||||||||||||||||||||
Total allowance for credit losses | $ | 205 | $ | 76 | $ | 25 | $ | 20 | $ | 182 | $ | 43 | $ | 35 | $ | 17 | $ | 603 |
Loans: | |||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | 7,122 | $ | 10,750 | $ | 13,834 | $ | 2,962 | $ | 12,990 | $ | 2,477 | $ | 767 | $ | 679 | $ | 51,581 | |||||||||||||||||
Individually evaluated for impairment(1) | 655 | 139 | 18 | 89 | 596 | 14 | 19 | — | 1,530 | ||||||||||||||||||||||||||
Loans carried at lower of amortized cost or fair value less cost to sell | — | — | — | — | 758 | — | — | — | 758 | ||||||||||||||||||||||||||
Total loans | $ | 7,777 | $ | 10,889 | $ | 13,852 | $ | 3,051 | $ | 14,344 | $ | 2,491 | $ | 786 | $ | 679 | $ | 53,869 |
(1) | For consumer loans, these amounts represent TDR Loans for which we evaluate reserves using a discounted cash flow methodology. Each loan is individually identified as a TDR Loan and then grouped together with other TDR Loans with similar characteristics. The discounted cash flow analysis is then applied to these groups of TDR Loans. The loan balance above excludes TDR loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $632 million and $445 million at March 31, 2013 and 2012, respectively. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Commercial loans | $ | 58 | $ | 481 | |||
Consumer loans: | |||||||
Residential mortgages | 277 | 472 | |||||
Other consumer | 64 | 65 | |||||
Total consumer | 341 | 537 | |||||
Total loans held for sale | $ | 399 | $ | 1,018 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Mortgage servicing rights | $ | 202 | $ | 179 | |||
Purchased credit card relationships | 58 | 60 | |||||
Other | 7 | 8 | |||||
Total other intangible assets | $ | 267 | $ | 247 |
March 31, 2013 | December 31, 2012 | ||||
Annualized constant prepayment rate (“CPR”) | 18.2 | % | 22.4 | % | |
Constant discount rate | 12.5 | % | 11.3 | % | |
Weighted average life | 3.8 | 3.4 |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Fair value of MSRs: | |||||||
Beginning balance | $ | 168 | $ | 220 | |||
Additions related to loan sales | 6 | 8 | |||||
Changes in fair value due to: | |||||||
Change in valuation inputs or assumptions used in the valuation models | 26 | 16 | |||||
Realization of cash flows | (10 | ) | (16 | ) | |||
Ending balance | $ | 190 | $ | 228 |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Outstanding principal balances at period end | $ | 31,039 | $ | 32,041 | |||
Custodial balances maintained and included in noninterest bearing deposits at period end | $ | 722 | $ | 810 |
HSBC USA Inc. |
HSBC USA Inc. |
HSBC USA Inc. |
Derivative Assets(1) | Derivative Liabilities(1) | ||||||||||||||||||
Balance Sheet | Fair Value as of | Balance Sheet | Fair Value as of | ||||||||||||||||
Location | March 31, 2013 | December 31, 2012 | Location | March 31, 2013 | December 31, 2012 | ||||||||||||||
(in millions) | |||||||||||||||||||
Interest rate contracts | Other assets | $ | 42 | $ | 10 | Interest, taxes and other liabilities | $ | 668 | $ | 875 |
(1) | The derivative asset and derivative liabilities presented above may be eligible for netting and consequently may be shown net against a different line item on the consolidated balance sheet. Balance sheet categories in the above table represent the location of the assets and liabilities absent the netting of the balances. |
Gain (Loss) on Derivative | Gain (Loss) on Hedged Items | ||||||||||||||
Interest Income (Expense) | Other Income | Interest Income (Expense) | Other Income | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||
Interest rate contracts/AFS Securities | $ | (56 | ) | $ | 170 | $ | 112 | $ | (174 | ) | |||||
Interest rate contracts/subordinated debt | 4 | (1 | ) | (14 | ) | 1 | |||||||||
Total | $ | (52 | ) | $ | 169 | $ | 98 | $ | (173 | ) | |||||
Three Months Ended March 31, 2012 | |||||||||||||||
Interest rate contracts/AFS Securities | $ | (46 | ) | $ | 298 | $ | 179 | $ | (287 | ) | |||||
Interest rate contracts/subordinated debt | (14 | ) | 4 | (15 | ) | (4 | ) | ||||||||
Total | $ | (60 | ) | $ | 302 | $ | 164 | $ | (291 | ) |
HSBC USA Inc. |
Derivative Assets(1) | Derivative Liabilities(1) | ||||||||||||||||||
Balance Sheet | Fair Value as of | Balance Sheet | Fair Value as of | ||||||||||||||||
Location | March 31, 2013 | December 31, 2012 | Location | March 31, 2013 | December 31, 2012 | ||||||||||||||
(in millions) | |||||||||||||||||||
Interest rate contracts | Other assets | $ | 17 | $ | 47 | Interest, taxes and other liabilities | $ | 198 | $ | 236 |
(1) | The derivative asset and derivative liabilities presented above may be eligible for netting and consequently may be shown net against a different line item on the consolidated balance sheet. Balance sheet categories in the above table represent the location of the assets and liabilities absent the netting of the balances. |
Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Gain (Loss) Reclassed From AOCI into Income (Effective Portion) | Location of Gain (Loss) Recognized in Income on the Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Gain (Loss) Recognized in Income on the Derivative (Ineffective Portion) | |||||||||||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Interest rate contracts | $ | 34 | $ | 58 | Interest income (expense) | $ | (4 | ) | $ | (4 | ) | Other income | $ | — | $ | (1 | ) |
HSBC USA Inc. |
Derivative Assets(1) | Derivative Liabilities(1) | ||||||||||||||||||
Balance Sheet | Fair Value as of | Balance Sheet | Fair Value as of | ||||||||||||||||
Location | March 31, 2013 | December 31, 2012 | Location | March 31, 2013 | December 31, 2012 | ||||||||||||||
(in millions) | |||||||||||||||||||
Interest rate contracts | Trading assets | $ | 63,052 | $ | 70,865 | Trading liabilities | $ | 63,355 | $ | 70,450 | |||||||||
Foreign exchange contracts | Trading assets | 14,331 | 13,799 | Trading liabilities | 14,353 | 13,601 | |||||||||||||
Equity contracts | Trading assets | 1,304 | 1,287 | Trading liabilities | 1,310 | 1,291 | |||||||||||||
Precious metals contracts | Trading assets | 805 | 791 | Trading liabilities | 622 | 738 | |||||||||||||
Credit contracts | Trading assets | 6,685 | 7,128 | Trading liabilities | 6,700 | 7,347 | |||||||||||||
Total | $ | 86,177 | $ | 93,870 | $ | 86,340 | $ | 93,427 |
(1) | The derivative asset and derivative liabilities presented above may be eligible for netting and consequently may be shown net against a different line item on the consolidated balance sheet. Balance sheet categories in the above table represent the location of the assets and liabilities absent the netting of the balances. |
Derivative Assets(1) | Derivative Liabilities(1) | ||||||||||||||||||
Balance Sheet | Fair Value as of December 31, | Balance Sheet | Fair Value as of December 31, | ||||||||||||||||
Location | March 31, 2013 | December 31, 2012 | Location | March 31, 2013 | December 31, 2012 | ||||||||||||||
(in millions) | |||||||||||||||||||
Interest rate contracts | Other assets | $ | 801 | $ | 901 | Interest, taxes and other liabilities | $ | 90 | $ | 97 | |||||||||
Foreign exchange contracts | Other assets | 37 | 52 | Interest, taxes and other liabilities | 33 | 17 | |||||||||||||
Equity contracts | Other assets | 653 | 472 | Interest, taxes and other liabilities | 116 | 126 | |||||||||||||
Credit contracts | Other assets | 5 | 1 | Interest, taxes and other liabilities | 9 | 4 | |||||||||||||
Total | $ | 1,496 | $ | 1,426 | $ | 248 | $ | 244 |
(1) | The derivative asset and derivative liabilities presented above may be eligible for netting and consequently may be shown net against a different line item on the consolidated balance sheet. Balance sheet categories in the above table represent the location of the assets and liabilities absent the netting of the balances. |
HSBC USA Inc. |
Location of Gain (Loss) | Amount of Gain (Loss) Recognized in Income on Derivatives | ||||||||
Three Months Ended March 31, | Recognized in Income on Derivatives | 2013 | 2012 | ||||||
(in millions) | |||||||||
Interest rate contracts | Trading revenue | $ | 86 | $ | 18 | ||||
Interest rate contracts | Residential mortgage banking revenue | (7 | ) | (16 | ) | ||||
Foreign exchange contracts | Trading revenue | (138 | ) | 399 | |||||
Equity contracts | Trading revenue | (2 | ) | 18 | |||||
Precious metals contracts | Trading revenue | 42 | 35 | ||||||
Credit contracts | Trading revenue | 147 | (228 | ) | |||||
Total | $ | 128 | $ | 226 |
Location of Gain (Loss) | Amount of Gain (Loss) Recognized in Income on Derivatives | ||||||||
Three Months Ended March 31, | Recognized in Income on Derivatives | 2013 | 2012 | ||||||
(in millions) | |||||||||
Interest rate contracts | Other income | $ | (62 | ) | $ | (90 | ) | ||
Interest rate contracts | Residential mortgage banking revenue | (1 | ) | 7 | |||||
Foreign exchange contracts | Other income | (31 | ) | 14 | |||||
Equity contracts | Other income | 315 | 364 | ||||||
Credit contracts | Other income | — | (3 | ) | |||||
Total | $ | 221 | $ | 292 |
HSBC USA Inc. |
Moody’s | Long-Term Ratings | ||||||||||
Short-Term Ratings | A1 | A2 | A3 | ||||||||
(in millions) | |||||||||||
P-1 | $ | — | $ | 2 | $ | 269 | |||||
P-2 | 2 | 70 | 269 |
S&P | Long-Term Ratings | ||||||||||
Short-Term Ratings | AA- | A+ | A | ||||||||
(in millions) | |||||||||||
A-1+ | $ | — | $ | 68 | $ | 68 | |||||
A-1 | 19 | 19 | 286 |
March 31, 2013 | December 31, 2012 | ||||||
(in billions) | |||||||
Interest rate: | |||||||
Futures and forwards | $ | 242.7 | $ | 313.9 | |||
Swaps | 3,077.2 | 2,842.6 | |||||
Options written | 110.0 | 43.3 | |||||
Options purchased | 107.8 | 44.2 | |||||
3,537.7 | 3,244.0 | ||||||
Foreign Exchange: | |||||||
Swaps, futures and forwards | 946.5 | 743.7 | |||||
Options written | 74.6 | 54.9 | |||||
Options purchased | — | 55.5 | |||||
Spot | 86.0 | 56.3 | |||||
1,107.1 | 910.4 | ||||||
Commodities, equities and precious metals: | |||||||
Swaps, futures and forwards | 49.4 | 48.1 | |||||
Options written | 22.7 | 21.0 | |||||
Options purchased | 23.2 | 21.4 | |||||
95.3 | 90.5 | ||||||
Credit derivatives | 463.5 | 484.9 | |||||
Total | $ | 5,203.6 | $ | 4,729.8 |
HSBC USA Inc. |
Gross Amounts Not Offset in the Balance Sheet | |||||||||||||||||||||||
Gross Amounts of Recognized Assets | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets Presented in the Balance Sheet | Financial Instruments (2) | Cash Collateral Received | Net Amount | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
As of March 31, 2013: | |||||||||||||||||||||||
Derivatives (1) | $ | 87,732 | $ | 77,825 | $ | 9,907 | $ | 853 | $ | — | $ | 9,054 | |||||||||||
Securities purchased under agreements to resell | 12,833 | 6,472 | 6,361 | 6,358 | — | 3 | |||||||||||||||||
Total | $ | 100,565 | $ | 84,297 | $ | 16,268 | $ | 7,211 | $ | — | $ | 9,057 | |||||||||||
As of December 31, 2012: | |||||||||||||||||||||||
Derivatives (1) | $ | 95,353 | $ | 83,367 | $ | 11,986 | $ | 627 | $ | — | $ | 11,359 | |||||||||||
Securities purchased under agreements to resell | 5,736 | 2,587 | 3,149 | 3,146 | — | 3 | |||||||||||||||||
Total | $ | 101,089 | $ | 85,954 | $ | 15,135 | $ | 3,773 | $ | — | $ | 11,362 |
(1) | The gross amounts of recognized assets includes $86.2 billion of trading related derivatives which are included in trading assets in our consolidated balance sheet and $1.6 billion of derivatives designated in hedging activities that are included in other assets in our consolidated balance sheet at March 31, 2013.The gross amounts of recognized assets includes $93.9 billion of trading related derivatives which are included in trading assets in our consolidated balance sheet and $1.5 billion of derivatives designated in hedging activities that are included in other assets in our consolidated balance sheet at December 31, 2012. |
(2) | Represents securities received to cover derivative and financing transaction exposures. |
Gross Amounts Not Offset in the Balance Sheet | |||||||||||||||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Liabilities Presented in the Balance Sheet | Financial Instruments (2) | Cash Collateral Pledged | Net Amount | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
As of March 31, 2013: | |||||||||||||||||||||||
Derivatives (1) | $ | 87,454 | $ | 73,879 | $ | 13,575 | $ | 4,886 | $ | — | $ | 8,689 | |||||||||||
Securities sold under repurchase agreements | 10,131 | 6,472 | 3,659 | 3,659 | — | — | |||||||||||||||||
Total | $ | 97,585 | $ | 80,351 | $ | 17,234 | $ | 8,545 | $ | — | $ | 8,689 | |||||||||||
As of December 31, 2012: | |||||||||||||||||||||||
Derivatives (1) | $ | 94,782 | $ | 79,580 | $ | 15,202 | $ | 4,887 | $ | — | $ | 10,315 | |||||||||||
Securities sold under repurchase agreements | 9,404 | 2,587 | 6,817 | 6,817 | — | — | |||||||||||||||||
Total | $ | 104,186 | $ | 82,167 | $ | 22,019 | $ | 11,704 | $ | — | $ | 10,315 |
(1) | The gross amounts of recognized liabilities includes $86.3 billion of trading related derivatives which are included in trading liabilities in our consolidated balance sheet and $1.1 billion of derivatives designated in hedging activities that are included in interest, taxes and other liabilities in our consolidated balance sheet at March 31, 2013.The gross amounts of recognized liabilities includes $93.4 billion of trading related derivatives which are included in trading liabilities in our consolidated balance sheet and $1.4 billion of derivatives designated in hedging activities that are included in interest, taxes and other liabilities in our consolidated balance sheet at December 31, 2012. |
(2) | Represents securities pledged to cover derivative and financing transaction exposures. |
HSBC USA Inc. |
HSBC USA Inc. |
Loans | Long-Term Debt | Hybrid Instruments | Total | ||||||||||||
(in millions) | |||||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||
Interest rate and other components(1) | $ | — | $ | 63 | $ | (316 | ) | $ | (253 | ) | |||||
Credit risk component | 21 | (42 | ) | 33 | 12 | ||||||||||
Total mark-to-market on financial instruments designated at fair value | 21 | 21 | (283 | ) | (241 | ) | |||||||||
Net realized loss on financial instruments | (8 | ) | — | — | (8 | ) | |||||||||
Mark-to-market on the related derivatives | — | (62 | ) | 268 | 206 | ||||||||||
Net realized gain on the related long-term debt derivatives | — | 16 | — | 16 | |||||||||||
Gain (loss) on instruments designated at fair value and related derivatives | $ | 13 | $ | (25 | ) | $ | (15 | ) | $ | (27 | ) | ||||
Three Months Ended March 31, 2012 | |||||||||||||||
Interest rate and other components(1) | $ | 1 | $ | 83 | $ | (429 | ) | $ | (345 | ) | |||||
Credit risk component | 32 | (221 | ) | 33 | (156 | ) | |||||||||
Total mark-to-market on financial instruments designated at fair value | 33 | (138 | ) | (396 | ) | (501 | ) | ||||||||
Net realized loss on financial instruments | (1 | ) | — | — | (1 | ) | |||||||||
Mark-to-market on the related derivatives | — | (115 | ) | 389 | 274 | ||||||||||
Net realized gain on the related long-term debt derivatives | — | 16 | — | 16 | |||||||||||
Gain (loss) on instruments designated at fair value and related derivatives | $ | 32 | $ | (237 | ) | $ | (7 | ) | $ | (212 | ) |
(1) | As it relates to hybrid instruments, interest rate and other components includes interest rate, foreign exchange and equity contract risks. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||||||||
(dollars are in millions) | |||||||||||||
Tax expense at the U.S. federal statutory income tax rate | $ | 100 | 35.0 | % | $ | 34 | 35.0 | % | |||||
Increase (decrease) in rate resulting from: | |||||||||||||
State and local taxes, net of federal benefit | 17 | 5.9 | 6 | 6.1 | |||||||||
Adjustment of tax rate used to value deferred taxes | 2 | 0.6 | (10 | ) | (10.2 | ) | |||||||
Validation of tax accounts | (10 | ) | (3.5 | ) | — | — | |||||||
Accrual of tax reserves(1) | 14 | 4.9 | 16 | 16.3 | |||||||||
Tax exempt interest income | (3 | ) | (1.0 | ) | (2 | ) | (2.0 | ) | |||||
Tax credits and foreign operations | (18 | ) | (6.3 | ) | (25 | ) | (25.6 | ) | |||||
Other | 2 | 0.6 | (1 | ) | (1.2 | ) | |||||||
Total income tax expense | $ | 104 | 36.2 | % | $ | 18 | 18.4 | % |
(1) | Tax reserves in 2013 and 2012 relate to state uncertain tax positions which we no longer believe we meet the more likely than not requirement for recognition. |
HSBC USA Inc. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Unrealized gains (losses) on securities available-for-sale, not other-than temporarily impaired: | |||||||
Balance at beginning of period | $ | 992 | $ | 883 | |||
Other comprehensive loss for period: | |||||||
Net unrealized holding losses arising during period, net of tax of ($61) million and $(75) million, respectively | (82 | ) | (109 | ) | |||
Reclassification adjustment for gains realized in net income, net of tax of ($47) million and $(12) million, respectively (1) | (68 | ) | (18 | ) | |||
Total other comprehensive loss for period | (150 | ) | (127 | ) | |||
Balance at end of period | 842 | 756 | |||||
Unrealized (losses) gains on derivatives classified as cash flow hedges: | |||||||
Balance at beginning of period | (201 | ) | (229 | ) | |||
Other comprehensive income for period: | |||||||
Net gains arising during period, net of tax of $13 million and $27 million, respectively | 21 | 35 | |||||
Reclassification adjustment for losses realized in net income, net of tax of $2 million and $2 million, respectively (2) | 2 | 2 | |||||
Total other comprehensive income for period | 23 | 37 | |||||
Balance at end of period | (178 | ) | (192 | ) | |||
Pension and postretirement benefit liability: | |||||||
Balance at beginning of period | (6 | ) | (12 | ) | |||
Other comprehensive income for period: | |||||||
Change in unfunded pension postretirement liability, net of tax of $1 million | — | 1 | |||||
Amortization of prior service costs and transition obligation included in net income (3) | — | — | |||||
Total other comprehensive income for period | — | 1 | |||||
Balance at end of period | (6 | ) | (11 | ) | |||
Total accumulated other comprehensive income at end of period | $ | 658 | $ | 553 |
(1) | Amount reclassified to net income is included in other securities gains, net in our consolidated statement of income. |
(2) | Amount reclassified to net income relates to interest rate contracts and is included in interest income (expense) in our consolidated statement of income. |
(3) | Amount reclassified to net income is included in salaries and employee benefits in our consolidated statement of income. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Service cost – benefits earned during the period | $ | 1 | $ | 3 | |||
Interest cost on projected benefit obligation | 17 | 17 | |||||
Expected return on assets | (20 | ) | (21 | ) | |||
Amortization of prior service cost (benefit) | — | (1 | ) | ||||
Recognized losses | 13 | 11 | |||||
Pension expense | $ | 11 | $ | 9 |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Interest cost | $ | 1 | $ | 1 | |||
Amortization of transition obligation | — | 1 | |||||
Net periodic postretirement benefit cost | $ | 1 | $ | 2 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Assets: | |||||||
Cash and due from banks | $ | 152 | $ | 114 | |||
Interest bearing deposits with banks | 672 | 714 | |||||
Securities purchased under agreements to resell | 180 | — | |||||
Trading assets(1) | 19,625 | 21,370 | |||||
Loans | 4,779 | 4,514 | |||||
Other | 915 | 858 | |||||
Total assets | $ | 26,323 | $ | 27,570 | |||
Liabilities: | |||||||
Deposits | $ | 19,830 | $ | 13,863 | |||
Trading liabilities(1) | 22,940 | 23,910 | |||||
Short-term borrowings | 2,376 | 2,721 | |||||
Long-term debt | 3,990 | 3,990 | |||||
Other | 501 | 459 | |||||
Total liabilities | $ | 49,637 | $ | 44,943 |
(1) | Trading assets and liabilities exclude the impact of netting which allows the offsetting of amounts relating to certain contracts if certain conditions are met. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Income/(Expense): | |||||||
Interest income | $ | 22 | $ | 13 | |||
Interest expense | (20 | ) | (24 | ) | |||
Net interest income (loss) | $ | 2 | $ | (11 | ) | ||
Servicing and other fees from HSBC affiliate: | |||||||
Fees and commissions: | |||||||
HSBC Finance | $ | 21 | $ | 14 | |||
HSBC Markets (USA) Inc. (“HMUS”) | 5 | 5 | |||||
Other HSBC affiliates | 16 | 28 | |||||
Other HSBC affiliates income | 12 | 9 | |||||
Total affiliate income | $ | 54 | $ | 56 | |||
Residential mortgage banking revenue | $ | — | $ | 2 | |||
Support services from HSBC affiliates: | |||||||
HSBC Finance | $ | (4 | ) | $ | (10 | ) | |
HMUS | (52 | ) | (73 | ) | |||
HSBC Technology & Services (USA) (“HTSU”) | (233 | ) | (234 | ) | |||
Other HSBC affiliates | (35 | ) | (51 | ) | |||
Total support services from HSBC affiliates | $ | (324 | ) | $ | (368 | ) | |
Stock based compensation expense with HSBC | $ | (9 | ) | $ | (12 | ) |
• | In July 2004, we sold the account relationships associated with $970 million of credit card receivables to HSBC Finance and on a daily basis, we purchased new originations on these credit card receivables. As discussed in Note 8, “Intangible Assets,” on March 29, 2012 we re-purchased these account relationships from HSBC Finance for $108 million and as a result, we stopped purchasing new originations on these credit card accounts from HSBC Finance. We purchased $492 million of credit card receivables from HSBC Finance during the three months ended March 31, 2012. HSBC Finance continued to service |
HSBC USA Inc. |
• | In 2003 and 2004, we purchased approximately $3.7 billion of residential mortgage loans from HSBC Finance. HSBC Finance continues to service these loans for us for a fee. At March 31, 2013 and December 31, 2012, HSBC Finance was servicing $1.1 billion and $1.2 billion, respectively, of residential mortgage loans for us. We paid HSBC Finance fees for servicing these loans of $1 million and $1 million during the three months ended March 31, 2013 and 2012, respectively. |
• | In the fourth quarter of 2009, an initiative was begun to streamline the servicing of real estate secured receivables across North America. As a result, certain functions that we had previously performed for our mortgage customers were being performed by HSBC Finance for all North America mortgage customers, including our mortgage customers. Additionally, we began performing certain functions for all North America mortgage customers where these functions had been previously provided separately by each entity. During 2011, we began a process to separate these functions so that each entity will be servicing its own mortgage customers when the process is completed. During the three months ended March 31, 2013 and 2012, we paid $2 million and $2 million, respectively, for services we received from HSBC Finance and received less than $1 million and $2 million, respectively, for services we provided to HSBC Finance. |
• | In July 2010, certain employees in the real estate receivable default servicing department of HSBC Finance were transferred to the mortgage loan servicing department of a subsidiary of HSBC Bank USA and subsequently to HSBC Bank USA. These employees continue to service defaulted real estate secured receivables for HSBC Finance and we receive a fee for providing these services. During the three months ended March 31, 2013 and 2012, we received servicing revenue from HSBC Finance of $16 million and $14 million, respectively. |
• | We extended a secured $1.5 billion uncommitted 364 day credit facility to certain subsidiaries of HSBC Finance. This facility was renewed for an additional 364 days in November 2012. Any draws on this credit facility by HSBC Finance require regulatory approval. There were no balances outstanding at March 31, 2013 and December 31, 2012. |
• | During the fourth quarter of 2011, we extended an unsecured $3.0 billion 364 day uncommitted revolving credit agreement to HSBC Finance which allowed for borrowings with maturities of up to 15 years. During the second quarter of 2012, an amendment was executed to increase this uncommitted revolving credit agreement to $4.0 billion. As of March 31, 2013 and December 31, 2012, $2.0 billion was outstanding under this credit agreement with $512 million maturing in September 2017 and $1.5 billion maturing in January 2018. |
• | In May 2012, we extended a $2.0 billion committed revolving credit facility to HSBC Finance which expires in May 2017. As of March 31, 2013 and December 31, 2012 there were no amounts outstanding under this credit facility. |
Private Label | Credit Card | ||||||||||||||||
Cards | Commercial and Closed End Loans | General Motors | Union Privilege | Other | Total | ||||||||||||
(in billions) | |||||||||||||||||
Total loans purchased on a daily basis from HSBC Finance during: | |||||||||||||||||
Three Months Ended March 31, 2012 | 3.3 | — | 2.9 | .7 | .5 | 7.4 |
HSBC USA Inc. |
• | We utilize HSBC Securities (USA) Inc. (“HSI”) for broker dealer, debt and preferred stock underwriting, customer referrals, loan syndication and other treasury and traded markets related services, pursuant to service level agreements. Fees charged by HSI for broker dealer, loan syndication services, treasury and traded markets related services are included in support services from HSBC affiliates. Debt underwriting fees charged by HSI are deferred as a reduction of long-term debt and amortized to interest expense over the life of the related debt. Preferred stock issuance costs charged by HSI are recorded as a reduction of capital surplus. Customer referral fees paid to HSI are netted against customer fee income, which is included in other fees and commissions. |
• | We have extended loans and lines, some of them uncommitted, to HMUS and its subsidiaries in the amount of $3.8 billion and $3.8 billion at March 31, 2013 and December 31, 2012. At March 31, 2013 and December 31, 2012, $250 million and $310 million, respectively, was outstanding on these loans and lines. Interest income on these loans and lines totaled $1 million and $1 million during the three months ended March 31, 2013 and 2012, respectively. |
• | HNAH extended a $1.0 billion senior debt to us in August 2009. This is a five year floating rate debt which matures in August 2014. In addition, in April 2011, we borrowed an additional $3.0 billion from HNAH. This senior debt matures in three equal installments of $1.0 billion in April 2013, 2015 and 2016. The debt bears interest at 90 day USD Libor plus a spread, with each maturity at a different spread. Interest expense on this debt totaled $14 million and $16 million during the three months ended March 31, 2013 and 2012, respectively. |
• | In addition to purchases of U.S. Treasury and U.S. Government Agency securities, we purchased both foreign-denominated and USD denominated marketable securities from certain affiliates including HSI, HSBC Asia-Pacific, HSBC Mexico, HSBC London, HSBC Brazil, HSBC Chile and HSBC Canada. Marketable securities outstanding from these purchases are reflected in trading assets and totaled $13 million and $14 million at March 31, 2013 and December 31, 2012, respectively. |
• | We have a committed unused line of credit with HSBC Investment (Bahamas) Limited of $900 million at March 31, 2013 and December 31, 2012. |
• | We have a committed unused line of credit with HSBC Holdings plc of $500 million at March 31, 2013 and December 31, 2012. |
• | We have an uncommitted unused line of credit with HNAI of $150 million at March 31, 2013 and December 31, 2012. |
• | We have extended loans and lines of credit to various other HSBC affiliates totaling $460 million at March 31, 2013 and December 31, 2012. At March 31, 2013 and December 31, 2012, there were no amounts outstanding under these loans or lines of credit. |
• | Historically, we have provided support to several HSBC affiliate sponsored asset-backed commercial paper (“ABCP”) conduits by purchasing A-1/P-1 rated commercial paper issued by them. At March 31, 2013 and December 31, 2012, no ABCP issued by such conduits was held. |
• | We routinely enter into derivative transactions with HSBC Finance and other HSBC affiliates as part of a global HSBC strategy to offset interest rate or other market risks associated with debt issues and derivative contracts with unaffiliated third parties. The notional value of derivative contracts related to these contracts was approximately $1,213.0 billion and $1,066.5 billion at March 31, 2013 and December 31, 2012, respectively. The net credit exposure (defined as the net fair value of derivative assets and liabilities) related to the contracts was approximately $673 million and $691 million at March 31, 2013 and December 31, 2012, respectively. Our Global Banking and Markets business accounts for these transactions on a mark to market basis, with the change in value of contracts with HSBC affiliates substantially offset by the change in value of related contracts entered into with unaffiliated third parties. |
HSBC USA Inc. |
• | HSBC North America's technology and certain centralized support services including human resources, corporate affairs, risk management, legal, compliance, tax, finance and other shared services are centralized within HTSU. Technology related assets and software purchased are generally purchased and owned by HTSU. HTSU also provides certain item processing and statement processing activities which are included in Support services from HSBC affiliates in the consolidated statement of income. We also receive fees from HTSU for providing them certain administrative services. The fees we receive from HTSU are recorded as a component of servicing and other fees from HSBC affiliates. |
• | Our domestic employees participate in a defined benefit pension plan sponsored by HSBC North America. Additional information regarding pensions is provided in Note 15 “Pension and Other Post retirement Benefits.” |
• | Employees participate in one or more stock compensation plans sponsored by HSBC. Our share of the expense of these plans on a pre-tax basis was $9 million and $12 million during the three months ended March 31, 2013 and 2012, respectively. |
• | We use HSBC Global Resourcing (UK) Ltd., an HSBC affiliate located outside of the United States, to provide various support services to our operations including among other areas customer service, systems, collection and accounting functions. The expenses related to these services of $23 million and $25 million during the three months ended March 31, 2013 and 2012, respectively, are included as a component of Support services from HSBC affiliates in the table above. Through February 2011, the expenses for these services for all HSBC North America operations were billed directly to HTSU who then billed these services to the appropriate HSBC affiliate who benefited from the services. Beginning in March 2011, HSBC Global Resourcing (UK) Ltd. began billing us directly for the services we receive from them. |
• | We did not pay any dividends to our parent company, HNAI, on our common stock during the three months ended March 31, 2013 and 2012. |
HSBC USA Inc. |
HSBC USA Inc. |
HSBC USA Inc. |
HSBC USA Inc. |
IFRS Consolidated Amounts | |||||||||||||||||||||||||||||||||||||||
RBWM | CMB | GBM | PB | Other | Adjustments/ Reconciling Items | Total | IFRS Adjustments(4) | IFRS Reclassi- fications(5) | U.S. GAAP Consolidated Totals | ||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Net interest income(1) | $ | 215 | $ | 170 | $ | 109 | $ | 45 | $ | (14 | ) | $ | (4 | ) | $ | 521 | $ | (17 | ) | $ | 1 | $ | 505 | ||||||||||||||||
Other operating income | 107 | 65 | 382 | 28 | (25 | ) | 4 | 561 | 34 | (3 | ) | 592 | |||||||||||||||||||||||||||
Total operating income | 322 | 235 | 491 | 73 | (39 | ) | — | 1,082 | 17 | (2 | ) | 1,097 | |||||||||||||||||||||||||||
Loan impairment charges(3) | 32 | 14 | 3 | 1 | — | — | 50 | (23 | ) | (6 | ) | 21 | |||||||||||||||||||||||||||
290 | 221 | 488 | 72 | (39 | ) | — | 1,032 | 40 | 4 | 1,076 | |||||||||||||||||||||||||||||
Operating expenses(2) | 291 | 162 | 230 | 60 | 42 | — | 785 | — | 4 | 789 | |||||||||||||||||||||||||||||
Profit before income tax expense | $ | (1 | ) | $ | 59 | $ | 258 | $ | 12 | $ | (81 | ) | $ | — | $ | 247 | $ | 40 | $ | — | $ | 287 | |||||||||||||||||
Balances at end of period: | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 19,634 | $ | 20,919 | $ | 207,785 | $ | 7,831 | $ | 164 | $ | — | $ | 256,333 | $ | (63,415 | ) | $ | 92 | $ | 193,010 | ||||||||||||||||||
Total loans, net | 16,747 | 19,449 | 23,244 | 5,722 | — | — | 65,162 | 1,194 | (3,992 | ) | 62,364 | ||||||||||||||||||||||||||||
Goodwill | 581 | 358 | 480 | 325 | — | — | 1,744 | 484 | — | 2,228 | |||||||||||||||||||||||||||||
Total deposits | 34,253 | 21,464 | 36,135 | 12,941 | — | — | 104,793 | (5,319 | ) | 17,575 | 117,049 | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2012 | |||||||||||||||||||||||||||||||||||||||
Net interest income(1) | $ | 247 | $ | 170 | $ | 143 | $ | 45 | $ | (11 | ) | $ | (6 | ) | $ | 588 | $ | (15 | ) | $ | 14 | $ | 587 | ||||||||||||||||
Other operating income | 97 | 68 | 326 | 29 | (235 | ) | 6 | 291 | 68 | 8 | 367 | ||||||||||||||||||||||||||||
Total operating income | 344 | 238 | 469 | 74 | (246 | ) | — | 879 | 53 | 22 | 954 | ||||||||||||||||||||||||||||
Loan impairment charges(3) | 41 | (17 | ) | (31 | ) | (2 | ) | — | — | (9 | ) | (3 | ) | 12 | — | ||||||||||||||||||||||||
303 | 255 | 500 | 76 | (246 | ) | — | 888 | 56 | 10 | 954 | |||||||||||||||||||||||||||||
Operating expenses(2) | 321 | 164 | 259 | 58 | 40 | — | 842 | 4 | 10 | 856 | |||||||||||||||||||||||||||||
Profit before income tax expense | $ | (18 | ) | $ | 91 | $ | 241 | $ | 18 | $ | (286 | ) | $ | — | $ | 46 | $ | 52 | $ | — | $ | 98 | |||||||||||||||||
Balances at end of period: | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 27,570 | $ | 22,633 | $ | 199,218 | $ | 6,931 | $ | 624 | $ | — | $ | 256,976 | $ | (65,781 | ) | $ | 137 | $ | 191,332 | ||||||||||||||||||
Total loans, net | 16,093 | 17,450 | 27,665 | 4,962 | — | — | 66,170 | (2,677 | ) | (10,227 | ) | 53,266 | |||||||||||||||||||||||||||
Goodwill | 581 | 358 | 480 | 325 | — | — | 1,744 | 484 | — | 2,228 | |||||||||||||||||||||||||||||
Total deposits | 37,758 | 21,219 | 40,461 | 12,033 | — | — | 111,471 | (4,441 | ) | 30,497 | 137,527 |
(1) | Net interest income of each segment represents the difference between actual interest earned on assets and interest paid on liabilities of the segment adjusted for a funding charge or credit. Segments are charged a cost to fund assets (e.g. customer loans) and receive a funding credit for funds provided (e.g. customer deposits) based on equivalent market rates. The objective of these charges/credits is to transfer interest rate risk from the segments to one centralized unit in Treasury and more appropriately reflect the profitability of segments. |
(2) | Expenses for the segments include fully apportioned corporate overhead expenses. |
(3) | The provision assigned to the segments is based on the segments’ net charge offs and the change in allowance for credit losses. |
(4) | Represents adjustments associated with differences between IFRSs and U.S. GAAP bases of accounting. |
(5) | Represents differences in financial statement presentation between IFRSs and U.S. GAAP. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||||||||||
Capital Amount | Well-Capitalized Minimum Ratio(1) | Actual Ratio | Capital Amount | Well-Capitalized Minimum Ratio(1) | Actual Ratio | ||||||||||||||
(dollars are in millions) | |||||||||||||||||||
Total capital ratio: | |||||||||||||||||||
HSBC USA Inc. | $ | 20,929 | 10.00 | % | 18.11 | % | $ | 20,764 | 10.00 | % | 19.52 | % | |||||||
HSBC Bank USA | 21,696 | 10.00 | 19.54 | 21,464 | 10.00 | 21.07 | |||||||||||||
Tier 1 capital ratio: | |||||||||||||||||||
HSBC USA Inc. | 14,717 | 6.00 | 12.74 | 14,480 | 6.00 | 13.61 | |||||||||||||
HSBC Bank USA | 16,326 | 6.00 | 14.70 | 15,482 | 6.00 | 15.20 | |||||||||||||
Tier 1 common ratio: | |||||||||||||||||||
HSBC USA Inc. | 12,610 | 5.00 | (2) | 10.91 | 12,373 | 5.00 | (2) | 11.63 | |||||||||||
HSBC Bank USA | 16,326 | 5.00 | 14.70 | 15,482 | 5.00 | 15.20 | |||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||
HSBC USA Inc. | 14,717 | 3.00 | (3) | 8.00 | 14,480 | 3.00 | (3) | 7.70 | |||||||||||
HSBC Bank USA | 16,326 | 5.00 | 9.26 | 15,482 | 5.00 | 8.43 | |||||||||||||
Risk weighted assets: | |||||||||||||||||||
HSBC USA Inc. | 115,552 | 106,395 | |||||||||||||||||
HSBC Bank USA | 111,059 | 101,865 |
(1) | HSBC USA Inc and HSBC Bank USA are categorized as “well-capitalized,” as defined by their principal regulators. To be categorized as well-capitalized under regulatory guidelines, a banking institution must have the minimum ratios reflected in the above table, and must not be subject to a directive, order, or written agreement to meet and maintain specific capital levels. |
(2) | There is no Tier 1 common ratio component in the definition of a well-capitalized bank holding company. The ratio shown is the required minimum Tier 1 common ratio as included in the Federal Reserve Board's final rule regarding capital plans for U.S. bank holding companies with total consolidated assets of $50 billion or more. |
(3) | There is no Tier 1 leverage ratio component in the definition of a well-capitalized bank holding company. The ratio shown is the minimum required ratio. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||||||
Consolidated Assets | Consolidated Liabilities | Consolidated Assets | Consolidated Liabilities | ||||||||||||
(in millions) | |||||||||||||||
Low income housing limited liability partnership: | |||||||||||||||
Interest bearing deposits with banks | $ | 210 | $ | — | $ | 216 | $ | — | |||||||
Other assets | 514 | — | 533 | — | |||||||||||
Long term debt | — | 92 | — | 92 | |||||||||||
Other liabilities | — | 125 | — | 152 | |||||||||||
Total | $ | 724 | $ | 217 | $ | 749 | $ | 244 |
HSBC USA Inc. |
Variable Interests Held Classified as Assets | Variable Interests Held Classified as Liabilities | Total Assets in Unconsolidated VIEs | Maximum Exposure to Loss | ||||||||||||
(in millions) | |||||||||||||||
At March 31, 2013 | |||||||||||||||
Asset-backed commercial paper conduits | $ | — | $ | — | $ | 16,273 | $ | 2,454 | |||||||
Structured note vehicles | 1,827 | 117 | 6,655 | 1,927 | |||||||||||
Total | $ | 1,827 | $ | 117 | $ | 22,928 | $ | 4,381 | |||||||
At December 31, 2012 | |||||||||||||||
Asset-backed commercial paper conduits | $ | — | $ | — | $ | 16,104 | $ | 2,212 | |||||||
Structured note vehicles | 2,117 | 154 | 7,055 | 2,217 | |||||||||||
Total | $ | 2,117 | $ | 154 | $ | 23,159 | $ | 4,429 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||||||
Carrying Value | Notional/Maximum Exposure to Loss | Carrying Value | Notional/Maximum Exposure to Loss | ||||||||||||
(in millions) | |||||||||||||||
Credit derivatives(1)(4) | $ | (621 | ) | $ | 229,166 | $ | (76 | ) | $ | 237,548 | |||||
Financial standby letters of credit, net of participations(2)(3) | — | 5,405 | — | 5,554 | |||||||||||
Performance (non-financial) guarantees(3) | — | 2,747 | — | 2,878 | |||||||||||
Liquidity asset purchase agreements(3) | — | 2,454 | — | 2,212 | |||||||||||
Total | $ | (621 | ) | $ | 239,772 | $ | (76 | ) | $ | 248,192 |
(1) | Includes $42.4 billion and $44.2 billion of notional issued for the benefit of HSBC affiliates at March 31, 2013 and December 31, 2012, respectively. |
(2) | Includes $840 million and $808 million issued for the benefit of HSBC affiliates at March 31, 2013 and December 31, 2012, respectively. |
(3) | For standby letters of credit and liquidity asset purchase agreements, maximum loss represents losses to be recognized assuming the letter of credit and liquidity facilities have been fully drawn and the obligors have defaulted with zero recovery. |
(4) | For credit derivatives, the maximum loss is represented by the notional amounts without consideration of mitigating effects from collateral or recourse arrangements. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||||||
Carrying (Fair) Value | Notional | Carrying (Fair) Value | Notional | ||||||||||||
(in millions) | |||||||||||||||
Sell-protection credit derivative positions | $ | (621 | ) | $ | 229,166 | $ | (76 | ) | $ | 237,548 | |||||
Buy-protection credit derivative positions | 777 | 234,311 | 120 | 247,384 | |||||||||||
Net position(1) | $ | 156 | $ | (5,145 | ) | $ | 44 | $ | (9,836 | ) |
(1) | Positions are presented net in the table above to provide a complete analysis of our risk exposure and depict the way we manage our credit derivative portfolio. The offset of the sell-protection credit derivatives against the buy-protection credit derivatives may not be legally binding in the absence of master netting agreements with the same counterparty. Furthermore, the credit loss triggering events for individual sell protection credit derivatives may not be the same or occur in the same period as those of the buy protection credit derivatives thereby not providing an exact offset. |
HSBC USA Inc. |
Average Life (in years) | Credit Ratings of the Obligors or the Transactions | ||||||||||||
Notional/Contractual Amounts | Investment Grade | Non-Investment Grade | Total | ||||||||||
(dollars are in millions) | |||||||||||||
Sell-protection Credit Derivatives(1) | |||||||||||||
Single name CDS | 2.4 | $ | 128,824 | $ | 27,325 | $ | 156,149 | ||||||
Structured CDS | 1.7 | 30,714 | 3,324 | 34,038 | |||||||||
Index credit derivatives | 3.3 | 25,166 | 58 | 25,224 | |||||||||
Total return swaps | 7.3 | 11,710 | 2,045 | 13,755 | |||||||||
Subtotal | 196,414 | 32,752 | 229,166 | ||||||||||
Standby Letters of Credit(2) | 1.3 | 6,694 | 1,458 | 8,152 | |||||||||
Total | $ | 203,108 | $ | 34,210 | $ | 237,318 |
(1) | The credit ratings in the table represent external credit ratings for classification as investment grade and non-investment grade. |
(2) | External ratings for most of the obligors are not available. Presented above are the internal credit ratings which are developed using similar methodologies and rating scale equivalent to external credit ratings for purposes of classification as investment grade and non-investment grade. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Pre- 2004 | $ | 2 | $ | 2 | |||
2004 | 9 | 4 | |||||
2005 | 4 | 4 | |||||
2006 | 15 | 16 | |||||
2007 | 37 | 45 | |||||
2008 | 23 | 27 | |||||
Post 2008 | 5 | 4 | |||||
Total repurchase demands received(1) | $ | 95 | $ | 102 |
(1) | Includes repurchase demands on loans sourced from our legacy broker channel of $77 million and $84 million at March 31, 2013 and 2012, respectively. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
GSEs | $ | 74 | $ | 86 | |||
Others | 4 | 3 | |||||
Total(1) | $ | 78 | $ | 89 |
(1) | Includes repurchase demands on loans sourced from our legacy broker channel of $64 million and $65 million at March 31, 2013 and December 31, 2012, respectively. |
• | The level of outstanding repurchase demands in inventory and our historical defense rate; |
• | The level of outstanding requests for loan files and the related historical repurchase request conversion rate and defense rate on such loans; and |
• | The level of potential future demands based on historical conversion rates of loans which we have not received a loan file request but are two or more payments delinquent or expected to become delinquent at an estimated conversion rate. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Balance at beginning of period | $ | 219 | $ | 237 | |||
Increase in liability recorded through earnings | 13 | 21 | |||||
Realized losses | (21 | ) | (35 | ) | |||
Balance at end of period | $ | 211 | $ | 223 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Interest bearing deposits with banks | $ | 462 | $ | 673 | |||
Trading assets(1) | 2,616 | 2,346 | |||||
Securities available-for-sale(2) | 18,323 | 17,236 | |||||
Securities held-to-maturity | 432 | 456 | |||||
Loans(3) | 1,935 | 2,142 | |||||
Other assets(4) | 2,244 | 2,265 | |||||
Total | $ | 26,012 | $ | 25,118 |
(1) | Trading assets are primarily pledged against liabilities associated with repurchase agreements. |
(2) | Securities available-for-sale are primarily pledged against derivatives, public fund deposits and various short-term and long term borrowings, as well as providing capacity for potential secured borrowings from the Federal Home Loan Bank and the Federal Reserve Bank. |
(3) | Loans are primarily residential mortgage loans pledged against long-term borrowings from the Federal Home Loan Bank. |
(4) | Other assets represent cash on deposit with non-banks related to derivative collateral support agreements. |
HSBC USA Inc. |
HSBC USA Inc. |
HSBC USA Inc. |
March 31, 2013 | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
(in millions) | |||||||||||||||||||
Financial assets: | |||||||||||||||||||
Short-term financial assets | $ | 18,759 | $ | 18,759 | $ | 1,238 | $ | 17,059 | $ | 462 | |||||||||
Securities purchased under resale agreements | 6,361 | 6,361 | — | 6,361 | — | ||||||||||||||
Non-derivative trading assets | 26,306 | 26,306 | 1,234 | 22,619 | 2,453 | ||||||||||||||
Derivatives | 9,907 | 9,907 | 26 | 9,732 | 149 | ||||||||||||||
Securities | 60,892 | 61,092 | 34,692 | 26,400 | — | ||||||||||||||
Commercial loans, net of allowance for credit losses | 43,370 | 45,051 | — | — | 45,051 | ||||||||||||||
Commercial loans designated under fair value option and held for sale | 3 | 3 | — | 3 | — | ||||||||||||||
Commercial loans held for sale | 55 | 55 | — | 55 | — | ||||||||||||||
Consumer loans, net of allowance for credit losses | 18,994 | 15,704 | — | — | 15,704 | ||||||||||||||
Consumer loans held for sale: | |||||||||||||||||||
Residential mortgages | 277 | 282 | — | — | 282 | ||||||||||||||
Other consumer | 64 | 64 | — | — | 64 | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Short-term financial liabilities | $ | 12,314 | $ | 12,314 | $ | — | $ | 12,314 | $ | — | |||||||||
Deposits: | |||||||||||||||||||
Without fixed maturities | 105,074 | 105,074 | — | 105,074 | — | ||||||||||||||
Fixed maturities | 3,599 | 3,604 | — | 3,604 | — | ||||||||||||||
Deposits designated under fair value option | 8,376 | 8,376 | — | 5,500 | 2,876 | ||||||||||||||
Non-derivative trading liabilities | 7,027 | 7,027 | 841 | 6,186 | — | ||||||||||||||
Derivatives | 13,575 | 13,575 | 17 | 13,437 | 121 | ||||||||||||||
Long-term debt | 14,349 | 15,014 | — | 15,014 | — | ||||||||||||||
Long-term debt designated under fair value option | 7,690 | 7,690 | — | 7,072 | 618 |
HSBC USA Inc. |
December 31, 2012 | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
(in millions) | |||||||||||||||||||
Financial assets: | |||||||||||||||||||
Short-term financial assets | $ | 15,074 | $ | 15,074 | $ | 1,359 | $ | 13,279 | $ | 436 | |||||||||
Securities purchased under resale agreements | 3,149 | 3,149 | — | 3,149 | — | ||||||||||||||
Non-derivative trading assets | 25,491 | 25,491 | 2,484 | 20,061 | 2,946 | ||||||||||||||
Derivatives | 11,986 | 11,986 | 30 | 11,785 | 171 | ||||||||||||||
Securities | 69,336 | 69,547 | 43,421 | 26,126 | — | ||||||||||||||
Commercial loans, net of allowance for credit losses | 43,833 | 45,153 | — | — | 45,153 | ||||||||||||||
Commercial loans designated under fair value option and held for sale | 465 | 465 | — | 465 | — | ||||||||||||||
Commercial loans held for sale | 16 | 16 | — | 16 | — | ||||||||||||||
Consumer loans, net of allowance for credit losses | 18,778 | 15,173 | — | — | 15,173 | ||||||||||||||
Consumer loans held for sale: | |||||||||||||||||||
Residential mortgages | 472 | 485 | — | — | 485 | ||||||||||||||
Other consumer | 65 | 65 | — | — | 65 | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Short-term financial liabilities | $ | 15,421 | $ | 15,421 | $ | — | $ | 15,421 | $ | — | |||||||||
Deposits: | |||||||||||||||||||
Without fixed maturities | 104,414 | 104,414 | — | 104,414 | — | ||||||||||||||
Fixed maturities | 4,565 | 4,574 | — | 4,574 | — | ||||||||||||||
Deposits designated under fair value option | 8,692 | 8,692 | — | 6,056 | 2,636 | ||||||||||||||
Non-derivative trading liabilities | 5,974 | 5,974 | 207 | 5,767 | — | ||||||||||||||
Derivatives | 15,202 | 15,202 | 21 | 15,054 | 127 | ||||||||||||||
Long-term debt | 14,465 | 15,163 | — | 15,163 | — | ||||||||||||||
Long-term debt designated under fair value option | 7,280 | 7,280 | — | 6,851 | 429 |
HSBC USA Inc. |
Fair Value Measurements on a Recurring Basis | |||||||||||||||||||||||
March 31, 2013 | Level 1 | Level 2 | Level 3 | Gross Balance | Netting(1) | Net Balance | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Trading Securities, excluding derivatives: | |||||||||||||||||||||||
U.S. Treasury, U.S. Government agencies and sponsored enterprises | $ | 1,234 | $ | 417 | $ | — | $ | 1,651 | $ | — | $ | 1,651 | |||||||||||
Collateralized debt obligations | — | 64 | 481 | 545 | — | 545 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Residential mortgages | — | 159 | — | 159 | — | 159 | |||||||||||||||||
Corporate and other domestic debt securities | — | 426 | 1,524 | 1,950 | — | 1,950 | |||||||||||||||||
Debt Securities issued by foreign entities: | |||||||||||||||||||||||
Corporate | — | 84 | 294 | 378 | — | 378 | |||||||||||||||||
Government | — | 5,572 | 143 | 5,715 | — | 5,715 | |||||||||||||||||
Equity securities | — | 22 | 11 | 33 | — | 33 | |||||||||||||||||
Precious metals trading | — | 15,875 | — | 15,875 | — | 15,875 | |||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||
Interest rate contracts | 77 | 63,829 | 6 | 63,912 | — | 63,912 | |||||||||||||||||
Foreign exchange contracts | 17 | 14,194 | 157 | 14,368 | — | 14,368 | |||||||||||||||||
Equity contracts | — | 1,766 | 191 | 1,957 | — | 1,957 | |||||||||||||||||
Precious metals contracts | 135 | 648 | 22 | 805 | — | 805 | |||||||||||||||||
Credit contracts | — | 5,746 | 944 | 6,690 | — | 6,690 | |||||||||||||||||
Derivatives netting | — | — | — | — | (77,825 | ) | (77,825 | ) | |||||||||||||||
Total derivatives | 229 | 86,183 | 1,320 | 87,732 | (77,825 | ) | 9,907 | ||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury, U.S. Government agencies and sponsored enterprises | 34,651 | 18,065 | — | 52,716 | — | 52,716 | |||||||||||||||||
Obligations of U.S. states and political subdivisions | — | 770 | — | 770 | — | 770 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Residential mortgages | — | 1 | — | 1 | — | 1 | |||||||||||||||||
Commercial mortgages | — | 185 | — | 185 | — | 185 | |||||||||||||||||
Home equity | — | 255 | — | 255 | — | 255 | |||||||||||||||||
Other | — | 85 | — | 85 | — | 85 | |||||||||||||||||
Corporate and other domestic debt securities | — | 26 | — | 26 | — | 26 | |||||||||||||||||
Debt Securities issued by foreign entities: | |||||||||||||||||||||||
Corporate | — | 4,678 | — | 4,678 | — | 4,678 | |||||||||||||||||
Government-backed | 41 | 529 | — | 570 | — | 570 | |||||||||||||||||
Equity securities | — | 172 | — | 172 | — | 172 | |||||||||||||||||
Loans(3) | — | 3 | — | 3 | — | 3 | |||||||||||||||||
Mortgage servicing rights(4) | — | — | 190 | 190 | — | 190 | |||||||||||||||||
Total assets | $ | 36,155 | $ | 133,571 | $ | 3,963 | $ | 173,689 | $ | (77,825 | ) | $ | 95,864 | ||||||||||
Liabilities: | |||||||||||||||||||||||
Deposits in domestic offices(5) | $ | — | $ | 5,500 | $ | 2,876 | $ | 8,376 | $ | — | $ | 8,376 | |||||||||||
Trading liabilities, excluding derivatives | 841 | 6,186 | — | 7,027 | — | 7,027 | |||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||
Interest rate contracts | 99 | 64,212 | — | 64,311 | — | 64,311 | |||||||||||||||||
Foreign exchange contracts | 1 | 14,362 | 23 | 14,386 | — | 14,386 | |||||||||||||||||
Equity contracts | — | 1,269 | 157 | 1,426 | — | 1,426 | |||||||||||||||||
Precious metals contracts | 8 | 592 | 22 | 622 | — | 622 | |||||||||||||||||
Credit contracts | — | 6,129 | 580 | 6,709 | — | 6,709 | |||||||||||||||||
Derivatives netting | — | — | — | — | (73,879 | ) | (73,879 | ) | |||||||||||||||
Total derivatives | 108 | 86,564 | 782 | 87,454 | (73,879 | ) | 13,575 | ||||||||||||||||
Long-term debt(6) | — | 7,072 | 618 | 7,690 | — | 7,690 | |||||||||||||||||
Total liabilities | $ | 949 | $ | 105,322 | $ | 4,276 | $ | 110,547 | $ | (73,879 | ) | $ | 36,668 |
HSBC USA Inc. |
Fair Value Measurements on a Recurring Basis | |||||||||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | Gross Balance | Netting(1) | Net Balance | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Trading Securities, excluding derivatives: | |||||||||||||||||||||||
U.S. Treasury, U.S. Government agencies and sponsored enterprises | $ | 2,484 | $ | 369 | $ | — | $ | 2,853 | $ | — | $ | 2,853 | |||||||||||
Collateralized debt obligations | — | — | 466 | 466 | — | 466 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Residential mortgages | — | 221 | — | 221 | — | 221 | |||||||||||||||||
Corporate and other domestic debt securities | — | 1,035 | 1,861 | 2,896 | — | 2,896 | |||||||||||||||||
Debt Securities issued by foreign entities: | |||||||||||||||||||||||
Corporate | — | 468 | 299 | 767 | — | 767 | |||||||||||||||||
Government | — | 5,609 | 311 | 5,920 | — | 5,920 | |||||||||||||||||
Equity securities | — | 27 | 9 | 36 | — | 36 | |||||||||||||||||
Precious metals trading | — | 12,332 | — | 12,332 | — | 12,332 | |||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||
Interest rate contracts | 98 | 71,717 | 8 | 71,823 | — | 71,823 | |||||||||||||||||
Foreign exchange contracts | 4 | 13,831 | 16 | 13,851 | — | 13,851 | |||||||||||||||||
Equity contracts | — | 1,593 | 166 | 1,759 | — | 1,759 | |||||||||||||||||
Precious metals contracts | 135 | 649 | 7 | 791 | — | 791 | |||||||||||||||||
Credit contracts | — | 5,961 | 1,168 | 7,129 | — | 7,129 | |||||||||||||||||
Derivatives netting | — | — | — | — | (83,367 | ) | (83,367 | ) | |||||||||||||||
Total derivatives | 237 | 93,751 | 1,365 | 95,353 | (83,367 | ) | 11,986 | ||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury, U.S. Government agencies and sponsored enterprises | 43,379 | 17,316 | — | 60,695 | — | 60,695 | |||||||||||||||||
Obligations of U.S. states and political subdivisions | — | 912 | — | 912 | — | 912 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Residential mortgages | — | 1 | — | 1 | — | 1 | |||||||||||||||||
Commercial mortgages | — | 214 | — | 214 | — | 214 | |||||||||||||||||
Home equity | — | 258 | — | 258 | — | 258 | |||||||||||||||||
Other | — | 84 | — | 84 | — | 84 | |||||||||||||||||
Corporate and other domestic debt securities | — | 26 | — | 26 | — | 26 | |||||||||||||||||
Debt Securities issued by foreign entities: | |||||||||||||||||||||||
Corporate | — | 831 | — | 831 | — | 831 | |||||||||||||||||
Government-backed | 42 | 4,480 | — | 4,522 | — | 4,522 | |||||||||||||||||
Equity securities | — | 173 | — | 173 | — | 173 | |||||||||||||||||
Loans(3) | — | 465 | — | 465 | — | 465 | |||||||||||||||||
Mortgage servicing rights(4) | — | — | 168 | 168 | — | 168 | |||||||||||||||||
Total assets | $ | 46,142 | $ | 138,572 | $ | 4,479 | $ | 189,193 | $ | (83,367 | ) | $ | 105,826 | ||||||||||
Liabilities: | |||||||||||||||||||||||
Deposits in domestic offices(5) | $ | — | $ | 6,056 | $ | 2,636 | $ | 8,692 | $ | — | $ | 8,692 | |||||||||||
Trading liabilities, excluding derivatives | 207 | 5,767 | — | 5,974 | — | 5,974 | |||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||
Interest rate contracts | 90 | 71,567 | 1 | 71,658 | — | 71,658 | |||||||||||||||||
Foreign exchange contracts | 25 | 13,582 | 11 | 13,618 | — | 13,618 | |||||||||||||||||
Equity contracts | — | 1,244 | 173 | 1,417 | — | 1,417 | |||||||||||||||||
Precious metals contracts | 19 | 712 | 7 | 738 | — | 738 | |||||||||||||||||
Credit contracts | — | 6,754 | 597 | 7,351 | — | 7,351 | |||||||||||||||||
Derivatives netting | — | — | — | — | (79,580 | ) | (79,580 | ) | |||||||||||||||
Total derivatives | 134 | 93,859 | 789 | 94,782 | (79,580 | ) | 15,202 | ||||||||||||||||
Long-term debt(6) | — | 6,851 | 429 | 7,280 | — | 7,280 | |||||||||||||||||
Total liabilities | $ | 341 | $ | 112,533 | $ | 3,854 | $ | 116,728 | $ | (79,580 | ) | $ | 37,148 |
(1) | Represents counterparty and cash collateral netting which allow the offsetting of amounts relating to certain contracts if certain conditions are met. |
(2) | Includes trading derivative assets of $8.4 billion and $10.5 billion and trading derivative liabilities of $12.5 billion and $13.8 billion as of March 31, 2013 and December 31, 2012, respectively, as well as derivatives held for hedging and commitments accounted for as derivatives. |
HSBC USA Inc. |
(3) | Includes leveraged acquisition finance and other commercial loans held for sale or risk-managed on a fair value basis for which we have elected to apply the fair value option. See Note 7, “Loans Held for Sale,” for further information. |
(4) | See Note 8, “Intangible Assets,” for additional information. |
(5) | Represents structured deposits risk-managed on a fair value basis for which we have elected to apply the fair value option. |
(6) | Includes structured notes and own debt issuances which we have elected to measure on a fair value basis. |
Jan 1, 2013 | Total Gains and (Losses) Included in(1) | Purch- ases | Issu- ances | Settle- ments | Transfers Into Level 3 | Transfers Out of Level 3 | Mar. 31, 2013 | Current Period Unrealized Gains (Losses) | |||||||||||||||||||||||||||||||
Trading Revenue (Loss) | Other Revenue | ||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||
Trading assets, excluding derivatives: | |||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 466 | $ | 35 | $ | — | $ | 21 | $ | — | $ | (41 | ) | $ | — | $ | — | $ | 481 | $ | 35 | ||||||||||||||||||
Corporate and other domestic debt securities | 1,861 | 7 | — | 15 | — | (359 | ) | — | — | 1,524 | 4 | ||||||||||||||||||||||||||||
Corporate debt securities issued by foreign entities | 299 | (5 | ) | — | — | — | — | — | — | 294 | (5 | ) | |||||||||||||||||||||||||||
Government debt securities issued by foreign entities | 311 | 22 | — | — | — | (190 | ) | — | — | 143 | 19 | ||||||||||||||||||||||||||||
Equity securities | 9 | 2 | — | — | — | — | — | — | 11 | 2 | |||||||||||||||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||||||||||||||||||
Interest rate contracts | 7 | — | (1 | ) | — | — | — | — | — | 6 | (1 | ) | |||||||||||||||||||||||||||
Foreign exchange contracts | 5 | 15 | — | — | — | 122 | (8 | ) | — | 134 | 137 | ||||||||||||||||||||||||||||
Equity contracts | (7 | ) | 61 | — | — | — | (20 | ) | 7 | (7 | ) | 34 | 41 | ||||||||||||||||||||||||||
Credit contracts | 571 | (49 | ) | — | — | — | (112 | ) | (46 | ) | — | 364 | (197 | ) | |||||||||||||||||||||||||
Mortgage servicing rights(4) | 168 | — | 16 | — | 6 | — | — | — | 190 | 16 | |||||||||||||||||||||||||||||
Total assets | $ | 3,690 | $ | 88 | $ | 15 | $ | 36 | $ | 6 | $ | (600 | ) | $ | (47 | ) | $ | (7 | ) | $ | 3,181 | $ | 51 | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||
Deposits in domestic offices | $ | (2,636 | ) | $ | (40 | ) | $ | — | $ | — | $ | (404 | ) | $ | 108 | $ | 11 | $ | 85 | (2,876 | ) | $ | (32 | ) | |||||||||||||||
Long-term debt | (429 | ) | (31 | ) | — | — | (210 | ) | 51 | — | 1 | (618 | ) | (25 | ) | ||||||||||||||||||||||||
Total liabilities | $ | (3,065 | ) | $ | (71 | ) | $ | — | $ | — | $ | (614 | ) | $ | 159 | $ | 11 | $ | 86 | $ | (3,494 | ) | $ | (57 | ) |
HSBC USA Inc. |
Jan 1, 2012 | Total Gains and (Losses) Included in(1) | Purch- ases | Issu- ances | Settle- ments | Transfers Into Level 3 | Transfers Out of Level 3 | Mar. 31, 2012 | Current Period Unrealized Gains (Losses) | |||||||||||||||||||||||||||||||
Trading Revenue (Loss) | Other Revenue | ||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||
Trading assets, excluding derivatives: | |||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 703 | $ | 39 | $ | — | $ | 1 | $ | — | $ | (82 | ) | $ | — | $ | — | $ | 661 | $ | 33 | ||||||||||||||||||
Corporate and other domestic debt securities | 1,679 | 20 | — | 82 | — | (28 | ) | — | — | 1,753 | 20 | ||||||||||||||||||||||||||||
Corporate debt securities issued by foreign entities | 253 | 41 | — | — | — | — | — | — | 294 | 41 | |||||||||||||||||||||||||||||
Equity securities | 13 | — | — | — | — | — | — | — | 13 | 3 | |||||||||||||||||||||||||||||
Derivatives(2): | |||||||||||||||||||||||||||||||||||||||
Interest rate contracts | 9 | — | — | — | — | — | — | — | 9 | — | |||||||||||||||||||||||||||||
Foreign exchange contracts | (1 | ) | (1 | ) | — | — | — | — | (3 | ) | — | (5 | ) | (1 | ) | ||||||||||||||||||||||||
Equity contracts | (83 | ) | 50 | — | — | — | (19 | ) | — | (1 | ) | (53 | ) | 27 | |||||||||||||||||||||||||
Credit contracts | 1,353 | (375 | ) | — | — | — | 6 | — | — | 984 | (346 | ) | |||||||||||||||||||||||||||
Loans(3) | 11 | — | — | — | — | — | — | (11 | ) | — | (12 | ) | |||||||||||||||||||||||||||
Mortgage servicing rights(4) | 220 | — | — | — | 8 | — | — | — | 228 | — | |||||||||||||||||||||||||||||
Total assets | $ | 4,157 | $ | (226 | ) | $ | — | $ | 83 | $ | 8 | $ | (123 | ) | $ | (3 | ) | $ | (12 | ) | $ | 3,884 | $ | (235 | ) | ||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||
Deposits in domestic offices | $ | (2,867 | ) | $ | (56 | ) | $ | — | $ | — | $ | (287 | ) | $ | 82 | $ | 3 | $ | 161 | (2,964 | ) | $ | (41 | ) | |||||||||||||||
Long-term debt | (86 | ) | (1 | ) | — | — | (89 | ) | 3 | — | 13 | (160 | ) | — | |||||||||||||||||||||||||
Total liabilities | $ | (2,953 | ) | $ | (57 | ) | $ | — | $ | — | $ | (376 | ) | $ | 85 | $ | 3 | $ | 174 | $ | (3,124 | ) | $ | (41 | ) |
(1) | Includes realized and unrealized gains and losses. |
(2) | Level 3 net derivatives included derivative assets of $1.3 billion and derivative liabilities of $782 million as of March 31, 2013 and derivative assets of $2.0 billion and derivative liabilities of $2.2 billion as of March 31, 2012. |
(3) | Includes Level 3 corporate lending activities risk-managed on a fair value basis for which we have elected the fair value option. |
(4) | See Note 8, “Intangible Assets,” for additional information. |
HSBC USA Inc. |
As of March 31, 2013 | |||||||||
Financial Instrument Type | Fair Value (in millions) | Valuation Technique(s) | Significant Unobservable Inputs | Range of Inputs | |||||
Collateralized debt obligations | 481 | Broker quotes or consensus pricing and, where applicable, discounted cash flows | Prepayment rates | -% - 6% | |||||
Conditional default rates | 4% - 11% | ||||||||
Loss severity rates | 50% -95% | ||||||||
Corporate and other domestic debt securities | 1,524 | Discounted cash flows | Spread volatility on collateral assets | 1.1% - 4.0% | |||||
Correlation between insurance claim shortfall and collateral value | 80% | ||||||||
Corporate and government debt securities issued by foreign entities | 437 | Discounted cash flows | Correlations of default among a portfolio of credit names of embedded credit derivatives | 34.3% - 34.4% | |||||
Equity securities (investments in hedge funds) | 11 | Net asset value of hedge funds | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks | 30% - 100% | |||||
Interest rate derivative contracts | 6 | Market comparable adjusted for probability to fund | Probability to fund for rate lock commitments | 8% - 100% | |||||
Foreign exchange derivative contracts(1) | 134 | Option pricing model | Implied volatility of currency pairs | 1.6% - 20.9% | |||||
Equity derivative contracts(1) | 34 | Option pricing model | Equity / Equity Index volatility | 5% - 120% | |||||
Equity / Equity and Equity / Index correlation | 52% - 61% | ||||||||
Credit derivative contracts | 364 | Option pricing model | Correlation of defaults of a portfolio of reference credit names | 36.3% - 45.8% | |||||
Industry by industry correlation of defaults | 48% - 75% | ||||||||
Mortgage servicing rights | 190 | Option adjusted discounted cash flows | Constant prepayment rates | 7.3% - 33.1% | |||||
Option adjusted spread | 8.07% - 19.07% | ||||||||
Estimated annualized costs to service | $91 - $256 per account | ||||||||
Deposits in domestic offices (structured deposits) (1)(2) | (2,876 | ) | Option adjusted discounted cash flows | Implied volatility of currency pairs | 1.6% - 20.9% | ||||
Equity / Equity Index volatility | 5% - 120% | ||||||||
Equity / Equity and Equity / Index correlation | 52% - 61% | ||||||||
Long-term debt (structured notes) (1)(2) | (618 | ) | Option adjusted discounted cash flows | Implied volatility of currency pairs | 1.6% - 20.9% | ||||
Equity / Equity Index volatility | 5% - 120% | ||||||||
Equity / Equity and Equity / Index correlation | 52% - 61% |
HSBC USA Inc. |
As of December 31, 2012 | |||||||||
Financial Instrument Type | Fair Value (in millions) | Valuation Technique(s) | Significant Unobservable Inputs | Range of Inputs | |||||
Collateralized debt obligations | 466 | Broker quotes or consensus pricing and, where applicable, discounted cash flows | Prepayment rates | -% - 6% | |||||
Conditional default rates | 4% - 14% | ||||||||
Loss severity rates | 50% - 100% | ||||||||
Corporate and other domestic debt securities | 1,861 | Discounted cash flows | Spread volatility on collateral assets | 1.5% - 4.0% | |||||
Correlation between insurance claim shortfall and collateral value | 80% | ||||||||
Corporate and government debt securities issued by foreign entities | 610 | Discounted cash flows | Correlations of default among a portfolio of credit names of embedded credit derivatives | 28.56% - 28.57% | |||||
Equity securities (investments in hedge funds) | 9 | Net asset value of hedge funds | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks | 30% - 100% | |||||
Interest rate derivative contracts | 7 | Market comparable adjusted for probability to fund | Probability to fund for rate lock commitments | 8% - 100% | |||||
Foreign exchange derivative contracts(1) | 5 | Option pricing model | Implied volatility of currency pairs | 1.6% - 20.9% | |||||
Equity derivative contracts(1) | (7 | ) | Option pricing model | Equity / Equity Index volatility | 6% - 104% | ||||
Equity / Equity and Equity / Index correlation | 56% - 64% | ||||||||
Credit derivative contracts | 571 | Option pricing model | Correlation of defaults of a portfolio of reference credit names | 32.04% - 45.31% | |||||
Industry by industry correlation of defaults | 44% - 67% | ||||||||
Mortgage servicing rights | 168 | Option adjusted discounted cash flows | Constant prepayment rates | 8.5% - 44.8% | |||||
Option adjusted spread | 8.07% - 19.07% | ||||||||
Estimated annualized costs to service | $98 - $263 per account | ||||||||
Deposits in domestic offices (structured deposits) (1)(2) | (2,636 | ) | Option adjusted discounted cash flows | Implied volatility of currency pairs | 1.6% - 20.9% | ||||
Equity / Equity Index volatility | 6% - 104% | ||||||||
Equity / Equity and Equity / Index correlation | 56% - 64% | ||||||||
Long-term debt (structured notes) (1)(2) | (429 | ) | Option adjusted discounted cash flows | Implied volatility of currency pairs | 1.6% - 20.9% | ||||
Equity / Equity Index volatility | 6% - 104% | ||||||||
Equity / Equity and Equity / Index correlation | 56% - 64% |
(1) | We are the client-facing entity and we enter into identical but opposite derivatives to transfer the resultant risks to our affiliates. With the exception of counterparty credit risks, we are market neutral. The corresponding intra-group derivatives are presented as equity derivatives and foreign currency derivatives in the table. |
(2) | Structured deposits and structured notes contain embedded derivative features whose fair value measurements contain significant Level 3 inputs. |
▪ | Prepayment rate - The rate at which borrowers pay off the mortgage loans early. The prepayment rate is affected by a number of factors including the location of the mortgage collateral, the interest rate type of the mortgage loans, borrowers' credit and sensitivity to interest rate movement. The prepayment rate of our CDOs portfolio is tilted towards the low end of the range. |
▪ | Default rate - Annualized percentage of default rate over a group of collateral such as residential or commercial mortgage loans. The default rate and loss severity rate are positively correlated. The default rate of our portfolio is close to mid point of the range. |
HSBC USA Inc. |
▪ | Loss Severity Rate - Included in our Level 3 CDOs portfolio are collateralized loan obligations (CLOs) and trust preferred securities which are about equally distributed. The loss severity rate for trust preferred securities as of March 31, 2013 is about 1.8 times of CLOs. |
▪ | Equity Interest in Hedge Funds - As of March 31, 2013, HUSI owns interests in about 30 distressed hedge funds where the majority of the funds have been discounted at 50% to 60% to reflect our expectation of recovery. |
▪ | Correlation of Default - The default correlation of a group of credit exposures measures the likelihood that the credit references within a group will default together. The default correlation is not observable. For a Tranched Credit Default swap, HUSI, through its participation in the industry survey, estimates and validates the default correlation of benchmark market credit default swap indices which, after adjusting for any differences in the composition and the tenure between the market index and the bespoke tranche under measurement, is used as an input to measure a bespoke CDS tranche. The correlations of default of our credit derivative portfolio are not widely dispersed. |
▪ | Implied volatility - The implied volatility is a significant pricing input for freestanding or embedded options including equity, foreign currency and interest rate options. The level of volatility is a function of the nature of the underlying risk, the level of strike price and the years to maturity of the option. Depending on the underlying risk and tenure, we determine the implied volatility based on observable input where information is available. However, substantially all of the implied volatilities are derived based on historical information. The implied volatility for different foreign currency pairs is between 1.6% and 20.9% while the implied volatility for equity/equity or equity/equity index is between 5% and 120%, respectively at March 31, 2013. Although implied foreign currency volatility and equity volatility appear to be widely distributed at the portfolio level, the deviation of implied volatility on a trade-by-trade basis is narrower. The average deviation of implied volatility for the foreign currency pair and at-the-money equity option are 4.4% and 4.6%, respectively at March 31, 2013. |
▪ | Correlations of a group of foreign currency or equity - Correlation measures the relative change in values among two or more variables (i.e., equity or foreign currency pair). Variables can be positively or negatively correlated. Correlation is a key input in determining the fair value of a derivative referenced to a basket of variables such as equities or foreign currencies. A majority of the correlations are not observable, but are derived based on historical data. The correlation between equity/equity and equity/equity index was between 52% and 61% at March 31, 2013. |
HSBC USA Inc. |
Non-Recurring Fair Value Measurements as of March 31, 2013 | Total Gains (Losses) For the Three Months Ended Mar. 31 2013 | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(in millions) | |||||||||||||||||||
Residential mortgage loans held for sale(1) | $ | — | $ | 8 | $ | 66 | $ | 74 | $ | 3 | |||||||||
Impaired loans(2) | — | — | 125 | 125 | (1 | ) | |||||||||||||
Real estate owned(3) | 28 | — | — | 28 | 2 | ||||||||||||||
Total assets at fair value on a non-recurring basis | $ | 28 | $ | 8 | $ | 191 | $ | 227 | $ | 4 |
Non-Recurring Fair Value Measurements as of December 31, 2012 | Total Gains (Losses) For the Three Months Ended Mar. 31 2012 | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(in millions) | |||||||||||||||||||
Residential mortgage loans held for sale(1) | $ | — | $ | 10 | $ | 67 | $ | 77 | $ | (2 | ) | ||||||||
Impaired loans(2) | — | — | 155 | 155 | (11 | ) | |||||||||||||
Real estate owned(3) | 24 | — | — | 24 | — | ||||||||||||||
Total assets at fair value on a non-recurring basis | $ | 24 | $ | 10 | $ | 222 | $ | 256 | $ | (13 | ) |
(1) | As of March 31, 2013 and December 31, 2012, the fair value of the loans held for sale was below cost. Certain residential mortgage loans held for sale have been classified as a Level 3 fair value measurement within the fair value hierarchy as the underlying real estate properties which determine fair value are illiquid assets as a result of market conditions and significant inputs in estimating fair value were unobservable. Additionally, the fair value of these properties is affected by, among other things, the location, the payment history and the completeness of the loan documentation. |
(2) | Represents impaired commercial loans. Certain commercial loans have undergone troubled debt restructurings and are considered impaired. As a matter of practical expedient, we measure the credit impairment of a collateral-dependent loan based on the fair value of the collateral asset. The collateral often involves real estate properties that are illiquid due to market conditions. As a result, these commercial loans are classified as a Level 3 fair value measurement within the fair value hierarchy. |
(3) | Real estate owned are required to be reported on the balance sheet net of transactions costs. The real estate owned amounts in the table above reflect the fair value unadjusted for transaction costs. |
As of March 31, 2013 | ||||||||||
Financial Instrument Type | Fair Value (in millions) | Valuation Technique(s) | Significant Unobservable Inputs | Range of Inputs | ||||||
Residential mortgage loans held for sale | $ | 66 | Valuation of third party appraisal on underlying collateral | Loss severity rates | -% - 100% | |||||
Impaired loans | 125 | Valuation of third party appraisal on underlying collateral | Loss severity rates | .3% - 80.6% |
HSBC USA Inc. |
As of December 31, 2012 | ||||||||||
Financial Instrument Type | Fair Value (in millions) | Valuation Technique(s) | Significant Unobservable Inputs | Range of Inputs | ||||||
Residential mortgage loans held for sale | $ | 67 | Valuation of third party appraisal on underlying collateral | Loss severity rates | -% - 100% | |||||
Impaired loans | 155 | Valuation of third party appraisal on underlying collateral | Loss severity rates | .6% - 78.9% |
• | Mortgage Loans Held for Sale – Certain residential mortgage loans are classified as held for sale and are recorded at the lower of amortized cost or fair value. The fair value of these mortgage loans is determined based on the valuation information observed in alternative exit markets, such as the whole loan market, adjusted for portfolio specific factors. These factors include the location of the collateral, the loan-to-value ratio, the estimated rate and timing of default, the probability of default or foreclosure and loss severity if foreclosure does occur. |
• | Leveraged Loans – We record leveraged loans and revolvers held for sale at fair value. Where available, market consensus pricing obtained from independent sources is used to estimate the fair value of the leveraged loans and revolvers. In validating the fair value, we take into consideration the number of participants submitting pricing information, the range of pricing information and distribution, the methodology applied by the pricing services to cleanse the data and market liquidity. Where consensus pricing information is not available, fair value is estimated using observable market prices of similar instruments or inputs, including bonds, credit derivatives, and loans with similar characteristics. Where observable market parameters are not available, fair value is determined based on contractual cash flows, adjusted for the probability of default and estimated recoveries where applicable, discounted at the rate demanded by market participants under current market conditions. In those cases, we also consider the loan specific attributes and inherent credit risk and risk mitigating factors such as collateral arrangements. |
• | Commercial Loans – Commercial loans and commercial real estate loans are valued by discounting the contractual cash flows, adjusted for prepayments and the borrower’s credit risk, using a discount rate that reflects the current rates offered to borrowers of similar credit standing for the remaining term to maturity and, when applicable, our own estimate of liquidity premium. |
• | Commercial impaired loans – Fair value is determined based on the pricing quotes obtained from an independent third party appraisal. |
HSBC USA Inc. |
• | Consumer Loans – The estimated fair value of our consumer loans were determined by developing an approximate range of value from a mix of various sources as appropriate for the respective pool of assets. These sources included estimates from an HSBC affiliate which reflect over-the-counter trading activity, forward looking discounted cash flow models using assumptions consistent with those which would be used by market participants in valuing such receivables; trading input from other market participants which includes observed primary and secondary trades; where appropriate, the impact of current estimated rating agency credit tranching levels with the associated benchmark credit spreads; and general discussions held directly with potential investors. For revolving products, the estimated fair value excludes future draws on the available credit line as well as other items and, therefore, does not include the fair value of the entire relationship. |
• | U.S. Treasury, U.S. Government agency issued or guaranteed and Obligations of U.S. state and political subdivisions – As these securities transact in an active market, fair value measurements are based on quoted prices for the identical security or quoted prices for similar securities with adjustments as necessary made using observable inputs which are market corroborated. |
• | U.S. Government sponsored enterprises – For government sponsored mortgage-backed securities which transact in an active market, fair value measurements are based on quoted prices for the identical security or quoted prices for similar securities with adjustments as necessary made using observable inputs which are market corroborated. For government sponsored mortgage-backed securities which do not transact in an active market, fair value is determined primarily based on pricing information obtained from pricing services and is verified by internal review processes. |
• | Asset-backed securities, including collateralized debt obligations – Fair value is primarily determined based on pricing information obtained from independent pricing services adjusted for the characteristics and the performance of the underlying collateral. |
Prime | Alt-A | Subprime | ||||||||||||||||||||||||||
Rating of Securities:(1) | Collateral Type: | Level 2 | Level 3 | Level 2 | Level 3 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
AAA -A | Residential mortgages | $ | — | $ | — | $ | 88 | $ | — | $ | 68 | $ | — | $ | 156 | |||||||||||||
CCC-Unrated | Residential mortgages | — | — | — | — | 3 | — | 3 | ||||||||||||||||||||
$ | — | $ | — | $ | 88 | $ | — | $ | 71 | $ | — | $ | 159 |
HSBC USA Inc. |
Rating of Securities:(1) | Collateral Type: | Level 2 | Level 3 | |||||
(in millions) | ||||||||
AAA -A | Student loans | $ | 64 | $ | — | |||
BBB -B | Corporate loans | $ | — | $ | 303 | |||
Other | — | 178 | ||||||
Total BBB -B | — | 481 | ||||||
$ | 64 | $ | 481 |
Commercial Mortgages | Prime | Alt-A | Subprime | |||||||||||||||||||||||||||||||||
Rating of Securities:(1) | Collateral Type: | Level 2 | Level 3 | Level 2 | Level 3 | Level 2 | Level 3 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||
AAA -A | Residential mortgages | $ | 185 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 185 | |||||||||||||||||
Home equity | — | — | — | — | 111 | — | — | — | 111 | |||||||||||||||||||||||||||
Total AAA -A | 185 | — | — | — | 111 | — | — | — | 296 | |||||||||||||||||||||||||||
BBB -B | Home equity | — | — | — | — | 79 | — | — | — | 79 | ||||||||||||||||||||||||||
Other | — | — | — | — | 85 | — | — | — | 85 | |||||||||||||||||||||||||||
Total BBB -B | — | — | — | — | 164 | — | — | — | 164 | |||||||||||||||||||||||||||
CCC -Unrated | Residential mortgages | — | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||
Home equity | — | — | — | — | 65 | — | — | — | 65 | |||||||||||||||||||||||||||
Total CCC -Unrated | — | — | — | — | 66 | — | — | — | 66 | |||||||||||||||||||||||||||
$ | 185 | $ | — | $ | — | $ | — | $ | 341 | $ | — | $ | — | $ | — | $ | 526 |
(1) | We utilize Standard & Poor's ("S&P") as the primary source of credit ratings in the tables above. If S&P ratings are not available, ratings by Moody's and Fitch are used in that order. |
• | Other domestic debt and foreign debt securities (corporate and government) - A significant portion of the domestic and foreign securities are classified as Level 3 measurements. For non-callable corporate securities, a credit spread scale is created for each issuer. These spreads are then added to the equivalent maturity U.S. Treasury yield to determine current pricing. Credit spreads are obtained from the new market, secondary trading levels and dealer quotes. For securities with early redemption features, an option adjusted spread (“OAS”) model is incorporated to adjust the spreads determined above. Additionally, we survey the broker/dealer community to obtain relevant trade data including benchmark quotes and updated spreads. |
• | Equity securities – Except for those legacy investments in hedge funds, since most of our securities are transacted in active markets, fair value measurements are determined based on quoted prices for the identical security. For mutual fund investments, we receive monthly statements from the investment manager with the estimated fair value. |
HSBC USA Inc. |
• | Credit Derivatives – Use credit default curves and recovery rates which are generally provided by broker quotes and various pricing services. Certain credit derivatives may also use correlation inputs in their model valuation. Correlation is derived using market quotes from brokers and various pricing services. |
• | Interest Rate Derivatives – Swaps use interest rate curves based on currency that are actively quoted by brokers and other pricing services. Options will also use volatility inputs which are also quoted in the broker market. |
• | Foreign Exchange (“FX”) Derivatives – FX transactions use spot and forward FX rates which are quoted in the broker market. |
• | Equity Derivatives – Use listed equity security pricing and implied volatilities from equity traded options position. |
• | Precious Metal Derivative – Use spot and forward metal rates which are quoted in the broker market. |
HSBC USA Inc. |
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Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Income from continuing operations before income tax, as reported | $ | 287 | $ | 98 | |||
Fair value movement on own fair value option debt attributable to credit spread | 42 | 221 | |||||
Underlying income from continuing operations before income tax (1) | $ | 329 | $ | 319 |
(1) | Represents a non-U.S. GAAP financial measure. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Gains (Losses) | |||||||
Insurance monoline structured credit products(1) | $ | 20 | $ | 8 | |||
Other structured credit products(1) | 14 | 41 | |||||
Mortgage whole loans held for sale including whole loan purchase settlement (predominantly subprime)(2) | 2 | (1 | ) | ||||
Leverage acquisition finance loans(3) | 13 | 30 | |||||
Total gains | $ | 49 | $ | 78 |
HSBC USA Inc. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(dollars are in millions) | |||||||
Income from continuing operations | $ | 183 | $ | 80 | |||
Rate of return on average: | |||||||
Total assets | .4 | .2 | |||||
Total common shareholder’s equity | 4.1 | 1.5 | |||||
Net interest margin | 1.30 | 1.42 | |||||
Efficiency ratio | 71.9 | 89.7 | |||||
Commercial net charge-off ratio(1) | .55 | .90 | |||||
Consumer net charge-off ratio(1) | .89 | 1.36 | |||||
Balance Sheet Data: | March 31, 2013 | December 31, 2012 | |||||
Loans: | |||||||
Construction and other real estate | $ | 8,319 | $ | 8,457 | |||
Business and corporate banking | 12,725 | 12,608 | |||||
Global banking | 19,718 | 20,009 | |||||
Other commercial loans | 2,877 | 3,076 | |||||
Total commercial loans | 43,639 | 44,150 | |||||
Residential mortgages, excluding home equity mortgages | 15,730 | 15,371 | |||||
Home equity mortgages | 2,236 | 2,324 | |||||
Credit card | 749 | 815 | |||||
Other consumer | 578 | 598 | |||||
Total consumer loans | 19,293 | 19,108 | |||||
Total loans | $ | 62,932 | $ | 63,258 | |||
Loans held for sale | $ | 399 | $ | 1,018 | |||
Allowance as a percent of loans(1) | .90 | 1.02 | |||||
Consumer two-months-and-over contractual delinquency | 6.54 | 6.92 | |||||
Loans to deposits ratio(2) | 71.02 | 71.35 | |||||
Total shareholders’ equity to total assets | 9.24 | % | 9.07 | % | |||
Total capital to risk weighted assets | 18.11 | 19.52 | |||||
Tier 1 capital to risk weighted assets | 12.74 | 13.61 | |||||
Tier 1 common equity to risk weighted assets | 10.91 | 11.63 |
(1) | Excludes loans held for sale. |
(2) | Represents period end loans, net of allowance for loan losses, as a percentage of domestic deposits equal to or less than $100,000. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | ||||||
(in millions) | ||||||||
Income from continuing operations before income tax from prior year | $ | 98 | $ | 292 | ||||
Increase (decrease) in income from continuing operations before income tax attributable to: | ||||||||
Balance sheet management activities excluding gains (losses) on security sales(1) | (58 | ) | 12 | |||||
Trading revenue(2) | (19 | ) | (35 | ) | ||||
Gains (losses) on security sales | 101 | (14 | ) | |||||
Loans held for sale(3) | 4 | 4 | ||||||
Residential mortgage banking related revenue(4) | 21 | 51 | ||||||
Gain (loss) on own debt designated at fair value and related derivatives(5) | 212 | (222 | ) | |||||
Loss on instruments designated at fair value and related derivatives, excluding own debt(5) | (27 | ) | (11 | ) | ||||
Provision for credit losses(6) | (21 | ) | (2 | ) | ||||
Interest expense on certain tax exposures(7) | (4 | ) | (11 | ) | ||||
Impairment of software development costs | — | 78 | ||||||
All other activity(8) | (20 | ) | (44 | ) | ||||
Income from continuing operations before income tax for current year | $ | 287 | $ | 98 |
(1) | Balance sheet management activities primarily generate net interest income resulting from management of interest rate risk associated with the repricing characteristics of balance sheet assets and liabilities. For additional discussion regarding Global Banking and Markets net interest income, trading revenues, and the Global Banking and Markets business segment, see the caption “Business Segments” in this MD&A. |
(2) | For additional discussion regarding trading revenue, see the caption “Results of Operations” in this MD&A. |
(3) | For additional discussion regarding loans held for sale, see the caption “Balance Sheet Review” in this MD&A. |
(4) | For additional discussion regarding residential mortgage banking revenue, see the caption “Results of Operations” in this MD&A. |
(5) | For additional discussion regarding fair value option on our own debt, see Note 12, “Fair Value Option,” in the accompanying consolidated financial statements. |
(6) | For additional discussion regarding provision for credit losses, see the caption “Results of Operations” in this MD&A. |
(7) | For additional discussion on interest expense on certain tax exposures, see Note 13, “Income Taxes,” in the accompanying consolidated financial statements. |
(8) | Represents other banking activities. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Net income – U.S. GAAP basis | $ | 183 | $ | 235 | |||
Adjustments, net of tax: | |||||||
IFRS reclassification of fair value measured financial assets during 2008 | (10 | ) | (31 | ) | |||
Securities | (3 | ) | (1 | ) | |||
Derivatives | 1 | — | |||||
Loan impairment | (7 | ) | (7 | ) | |||
Property | (2 | ) | (3 | ) | |||
Pension costs | 4 | 5 | |||||
Transfer of credit card receivables to held for sale and subsequent sale | — | 17 | |||||
Other | (14 | ) | 4 | ||||
Net income – IFRSs basis | 152 | 219 | |||||
Tax expense – IFRSs basis | 95 | 78 | |||||
Profit before tax – IFRSs basis | $ | 247 | $ | 297 |
HSBC USA Inc. |
HSBC USA Inc. |
Increase (Decrease) From | ||||||||||
December 31, 2012 | ||||||||||
March 31, 2013 | Amount | % | ||||||||
(dollars are in millions) | ||||||||||
Period end assets: | ||||||||||
Short-term investments | $ | 24,658 | $ | 6,871 | 38.6 | % | ||||
Loans, net | 62,364 | (247 | ) | (.4 | ) | |||||
Loans held for sale | 399 | (619 | ) | (60.8 | ) | |||||
Trading assets | 34,658 | (1,337 | ) | (3.7 | ) | |||||
Securities | 60,892 | (8,444 | ) | (12.2 | ) | |||||
Other assets | 10,039 | 219 | 2.2 | |||||||
$ | 193,010 | $ | (3,557 | ) | (1.8 | )% | ||||
Funding sources: | ||||||||||
Total deposits | $ | 117,049 | $ | (622 | ) | (.5 | )% | |||
Trading liabilities | 19,488 | (332 | ) | (1.7 | ) | |||||
Short-term borrowings | 11,802 | (3,131 | ) | (21.0 | ) | |||||
All other liabilities | 4,794 | 232 | 5.1 | |||||||
Long-term debt | 22,039 | 294 | 1.4 | |||||||
Shareholders’ equity | 17,838 | 2 | — | |||||||
$ | 193,010 | $ | (3,557 | ) | (1.8 | )% |
HSBC USA Inc. |
Increase (Decrease) From | ||||||||||
December 31, 2012 | ||||||||||
March 31, 2013 | Amount | % | ||||||||
(dollars are in millions) | ||||||||||
Commercial loans: | ||||||||||
Construction and other real estate | $ | 8,319 | $ | (138 | ) | (1.6 | )% | |||
Business and corporate banking | 12,725 | 117 | .9 | |||||||
Global banking(1) | 19,718 | (291 | ) | (1.5 | ) | |||||
Other commercial loans | 2,877 | (199 | ) | (6.5 | ) | |||||
Total commercial loans | 43,639 | (511 | ) | (1.2 | ) | |||||
Consumer loans: | ||||||||||
Residential mortgages, excluding home equity mortgages | 15,730 | 359 | 2.3 | |||||||
Home equity mortgages | 2,236 | (88 | ) | (3.8 | ) | |||||
Total residential mortgages | 17,966 | 271 | 1.5 | |||||||
Credit Card | 749 | (66 | ) | (8.1 | ) | |||||
Other consumer | 578 | (20 | ) | (3.3 | ) | |||||
Total consumer loans | 19,293 | 185 | 1.0 | |||||||
Total loans | 62,932 | (326 | ) | (.5 | ) | |||||
Allowance for credit losses | 568 | (79 | ) | (12.2 | ) | |||||
Loans, net | $ | 62,364 | $ | (247 | ) | (.4 | )% |
(1) | Represents large multinational firms including globally focused U.S. corporate and financial institutions and USD lending to selected high quality Latin American and other multinational customers managed by HSBC on a global basis. |
HSBC USA Inc. |
Refreshed LTVs(1)(2) at March 31, 2013 | Refreshed LTVs(1)(2) at December 31, 2012 | ||||||||||
First Lien | Second Lien | First Lien | Second Lien | ||||||||
LTV < 80% | 81.0 | % | 59.9 | % | 75.8 | % | 62.3 | % | |||
80% < LTV < 90% | 8.2 | % | 13.5 | % | 10.7 | % | 13.8 | % | |||
90% < LTV < 100% | 5.2 | % | 11.0 | % | 6.4 | % | 10.2 | % | |||
LTV > 100% | 5.6 | % | 15.6 | % | 7.1 | % | 13.7 | % | |||
Average LTV for portfolio | 65.8 | % | 71.7 | % | 67.8 | % | 73.1 | % |
(1) | Refreshed LTVs for first liens are calculated using the loan balance as of the reporting date. Refreshed LTVs for second liens are calculated using the loan balance as of the reporting date plus the senior lien amount at origination. Current estimated property values are derived from the property's appraised value at the time of loan origination updated by the change in the Federal Housing Finance Agency's (formerly known as the Office of Federal Housing Enterprise Oversight) house pricing index (“HPI”) at either a Core Based Statistical Area (“CBSA”) or state level. The estimated value of the homes could vary from actual fair values due to changes in condition of the underlying property, variations in housing price changes within metropolitan statistical areas and other factors. As a result, actual property values associated with loans that end in foreclosure may be significantly lower than the estimates used for purposes of this disclosure. |
(2) | Current property values are calculated using the most current HPIs available and applied on an individual loan basis, which results in an approximate three month delay in the production of reportable statistics. Therefore, the information in the table above reflects current estimated property values using HPIs as of December 31, 2012 and September 30, 2012, respectively. |
Increase (Decrease) From | ||||||||||
December 31, 2012 | ||||||||||
March 31, 2013 | Amount | % | ||||||||
(dollars are in millions) | ||||||||||
Total commercial loans | $ | 58 | $ | (423 | ) | (87.9 | )% | |||
Consumer loans: | ||||||||||
Residential mortgages | 277 | (195 | ) | (41.3 | ) | |||||
Other consumer | 64 | (1 | ) | (1.5 | ) | |||||
Total consumer loans | 341 | (196 | ) | (36.5 | ) | |||||
Total loans held for sale | $ | 399 | $ | (619 | ) | (60.8 | )% |
HSBC USA Inc. |
Increase (Decrease) From | ||||||||||
December 31, 2012 | ||||||||||
March 31, 2013 | Amount | % | ||||||||
(dollars are in millions) | ||||||||||
Trading assets: | ||||||||||
Securities(1) | $ | 10,431 | $ | (2,728 | ) | (20.7 | )% | |||
Precious metals | 15,875 | 3,543 | 28.7 | % | ||||||
Derivatives(2) | 8,352 | (2,152 | ) | (20.5 | )% | |||||
$ | 34,658 | $ | (1,337 | ) | (3.7 | )% | ||||
Trading liabilities: | ||||||||||
Securities sold, not yet purchased | 841 | 634 | 100+ | |||||||
Payables for precious metals | 6,186 | 419 | 7.3 | % | ||||||
Derivatives(3) | 12,461 | (1,385 | ) | (10.0 | )% | |||||
$ | 19,488 | $ | (332 | ) | (1.7 | )% |
(1) | Includes U.S. Treasury securities, securities issued by U.S. Government agencies and U.S. Government sponsored enterprises, other asset-backed securities, corporate bonds and debt securities. |
(2) | At March 31, 2013 and December 31, 2012, the fair value of derivatives included in trading assets has been reduced by $5.3 billion and $5.1 billion, respectively, relating to amounts recognized for the obligation to return cash collateral received under master netting agreements with derivative counterparties. |
(3) | At March 31, 2013 and December 31, 2012, the fair value of derivatives included in trading liabilities has been reduced by $1.4 billion and $1.3 billion, respectively, relating to amounts recognized for the right to reclaim cash collateral paid under master netting agreements with derivative. |
HSBC USA Inc. |
Increase (Decrease) From | ||||||||||
December 31, 2012 | ||||||||||
March 31, 2013 | Amount | % | ||||||||
(dollars are in millions) | ||||||||||
Individuals, partnerships and corporations | $ | 96,154 | $ | 304 | .3 | % | ||||
Domestic and foreign banks | 19,203 | (1,056 | ) | (5.2 | ) | |||||
U.S. government and states and political subdivisions | 969 | 276 | 39.8 | |||||||
Foreign governments and official institutions | 723 | (146 | ) | (16.8 | ) | |||||
Total deposits | $ | 117,049 | $ | (622 | ) | (.5 | )% | |||
Total core deposits(1) | $ | 89,171 | $ | (910 | ) | (1.0 | )% |
(1) | We monitor “core deposits” as a key measure for assessing results of our core banking network. Core deposits generally include all domestic demand, money market and other savings accounts, as well as time deposits with balances not exceeding $100,000. |
• | HSBC Premier, a premium service wealth and relationship banking proposition designed for the internationally-minded client with a dedicated premier relationship manager. Total Premier deposits have decreased to $22.5 billion at March 31, 2013 as compared to $22.8 billion at December 31, 2012 primarily as a result of the impact of the deposit repricing; and |
• | Deepening our existing customer relationships by needs-based sales of wealth, banking and mortgage products. |
HSBC USA Inc. |
Three Months Ended | ||||||||||||||
March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||
Number of REO properties at end of period | 240 | 221 | 203 | 188 | 201 | |||||||||
Number of properties added to REO inventory in the period | 119 | 96 | 87 | 88 | 106 | |||||||||
Average (gain) loss on sale of REO properties(1) | 6.4 | % | 1.6 | % | 2.1 | % | 8.0 | % | 2.7 | % | ||||
Average total loss on foreclosed properties(2) | 47.8 | % | 45.4 | % | 46.8 | % | 48.7 | % | 55.7 | % | ||||
Average time to sell REO properties (in days) | 280 | 285 | 296 | 273 | 362 |
(1) | Property acquired through foreclosure is initially recognized at the lower of amortized cost or its fair value less estimated costs to sell (“Initial REO Carrying Amount”). The average loss on sale of REO properties is calculated as cash proceeds less the Initial REO Carrying Amount divided by the unpaid loan principal balance prior to write-down (excluding any accrued finance income) plus certain other ancillary disbursements that, by law, are reimbursable from the cash proceeds (e.g., real estate tax advances) and were incurred prior to our taking title to the property and does not include holding costs on REO properties. This ratio represents the portion of our total loss on foreclosed properties that occurred after we took title to the property. |
(2) | The average total loss on foreclosed properties sold each quarter includes both the loss on sale of the REO property as discussed above and the cumulative write-downs recognized on the loans up to the time we took title to the property. This calculation of the average total loss on foreclosed properties uses the unpaid loan principal balance prior to write-down (excluding any accrued finance income) plus certain other ancillary disbursements that, by law, are reimbursable from the cash proceeds (e.g., real estate tax advances) and were incurred prior to the date we took title to the property and does not include holding costs on REO properties. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||
Yield on total earning assets | 1.90 | % | 2.16 | % | |
Expense on interest bearing liabilities | .81 | .87 | |||
Interest rate spread | 1.09 | 1.29 | |||
Benefit from net non-interest paying funds(1) | .21 | .13 | |||
Net interest margin | 1.30 | % | 1.42 | % |
(1) | Represents the benefit associated with interest earning assets in excess of interest bearing liabilities. The increased percentages reflect growth in this excess. |
Three Months Ended March 31, 2013 | Amount | Interest Rate Spread | ||||
(dollars are in millions) | ||||||
Net interest income/interest rate spread from prior year | $ | 550 | 1.29 | % | ||
Increase (decrease) in net interest income associated with: | ||||||
Trading related activities | (6 | ) | ||||
Balance sheet management activities(1) | (29 | ) | ||||
Commercial loans | 74 | |||||
Deposits | 11 | |||||
Interest on estimated tax exposures | (4 | ) | ||||
Other activity | (86 | ) | ||||
Net interest income/interest rate spread for current year | $ | 510 | 1.09 | % |
(1) | Represents our activities to manage interest rate risk associated with the repricing characteristics of balance sheet assets and liabilities. Interest rate risk, and our approach to managing such risk, are described under the caption “Risk Management” in this Form 10-Q. |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Commercial: | ||||||||||||||
Construction and other real estate | $ | 9 | $ | (20 | ) | $ | 29 | 100+ | ||||||
Business and corporate banking | 2 | 6 | (4 | ) | (66.7 | ) | ||||||||
Global banking | (1 | ) | (22 | ) | 21 | 95.5 | ||||||||
Other commercial | — | (2 | ) | 2 | 100.0 | |||||||||
Total commercial | $ | 10 | $ | (38 | ) | $ | 48 | 100+ | ||||||
Consumer: | ||||||||||||||
Residential mortgages, excluding home equity mortgages | (3 | ) | 15 | (18 | ) | (100+) | ||||||||
Home equity mortgages | 17 | 8 | 9 | 100+ | ||||||||||
Credit card receivables | (2 | ) | 11 | (13 | ) | (100+) | ||||||||
Other consumer | (1 | ) | 4 | (5 | ) | (100+) | ||||||||
Total consumer | 11 | 38 | (27 | ) | (71.1 | ) | ||||||||
Total provision for credit losses | $ | 21 | $ | — | $ | 21 | 100.0 | % |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Credit card fees | $ | 13 | $ | 30 | $ | (17 | ) | (56.7 | )% | |||||
Other fees and commissions | 170 | 194 | (24 | ) | (12.4 | ) | ||||||||
Trust income | 32 | 25 | 7 | 28.0 | ||||||||||
Trading revenue | 164 | 198 | (34 | ) | (17.2 | ) | ||||||||
Other securities gains, net | 131 | 30 | 101 | 100+ | ||||||||||
HSBC affiliate income: | ||||||||||||||
Fees and commissions | 42 | 47 | (5 | ) | (10.6 | ) | ||||||||
Other affiliate income | 12 | 9 | 3 | 33.3 | ||||||||||
Total HSBC affiliate income | 54 | 56 | (2 | ) | (3.6 | ) | ||||||||
Residential mortgage banking revenue(1) | 46 | 25 | 21 | 84.0 | ||||||||||
Loss on instruments designated at fair value and related derivatives | (27 | ) | (212 | ) | 185 | 87.3 | ||||||||
Other income: | ||||||||||||||
Valuation of loans held for sale | 3 | (1 | ) | 4 | N/A | |||||||||
Insurance | 1 | 2 | (1 | ) | (50.0 | ) | ||||||||
Earnings from equity investments | 1 | 2 | (1 | ) | (50.0 | ) | ||||||||
Miscellaneous income | 4 | 18 | (14 | ) | (77.8 | ) | ||||||||
Total other income | 9 | 21 | (12 | ) | (57.1 | ) | ||||||||
Total other revenues | $ | 592 | $ | 367 | $ | 225 | 61.3 | % |
(1) | Includes servicing fees received from HSBC Finance of less than $1 million and $2 million during the three months ended March 31, 2013 and 2012, respectively. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Account services | $ | 69 | $ | 82 | (13 | ) | (15.9 | ) | ||||||
Credit facilities | 52 | 65 | (13 | ) | (20.0 | ) | ||||||||
Custodial fees | 18 | 19 | (1 | ) | (5.3 | ) | ||||||||
Other | 31 | 28 | 3 | 10.7 | ||||||||||
Total other fees and commissions | $ | 170 | $ | 194 | $ | (24 | ) | (12.4 | )% |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Trading revenue | $ | 164 | $ | 198 | $ | (34 | ) | (17.2 | )% | |||||
Net interest income | (10 | ) | (6 | ) | (4 | ) | (66.7 | ) | ||||||
Trading related revenue | $ | 154 | $ | 192 | $ | (38 | ) | (19.8 | )% | |||||
Business: | ||||||||||||||
Derivatives(1) | $ | 69 | $ | 65 | $ | 4 | 6.2 | % | ||||||
Balance sheet management | (3 | ) | 11 | (14 | ) | (100+) | ||||||||
Foreign exchange | 65 | 71 | (6 | ) | (8.5 | ) | ||||||||
Precious metals | 26 | 32 | (6 | ) | (18.8 | ) | ||||||||
Global banking | — | 3 | (3 | ) | (100.0 | ) | ||||||||
Other trading | (3 | ) | 10 | (13 | ) | (100+) | ||||||||
Trading related revenue | $ | 154 | $ | 192 | $ | (38 | ) | (19.8 | )% |
(1) | Includes derivative contracts related to credit default and cross-currency swaps, equities, interest rates and structured credit products. |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest income | $ | 51 | $ | 51 | $ | — | — | % | ||||||
Servicing related income: | ||||||||||||||
Servicing fee income | 21 | 25 | (4 | ) | (16.0 | ) | ||||||||
Changes in fair value of MSRs due to: | ||||||||||||||
Changes in valuation, including inputs or assumptions | 26 | 16 | 10 | 62.5 | ||||||||||
Realization of cash flows | (10 | ) | (16 | ) | 6 | 37.5 | ||||||||
Trading – Derivative instruments used to offset changes in value of MSRs | (7 | ) | (12 | ) | 5 | 41.7 | ||||||||
Total servicing related income | 30 | 13 | 17 | 100+ | ||||||||||
Originations and sales related income: | ||||||||||||||
Gains on sales of residential mortgages | 24 | 18 | 6 | 33.3 | ||||||||||
Provision for repurchase obligations | (13 | ) | (21 | ) | 8 | 38.1 | ||||||||
Trading and hedging activity | — | 7 | (7 | ) | (100.0 | ) | ||||||||
Total originations and sales related income | 11 | 4 | 7 | 100+ | ||||||||||
Other mortgage income | 5 | 8 | (3 | ) | (37.5 | ) | ||||||||
Total residential mortgage banking revenue included in other revenues | 46 | 25 | 21 | 84.0 | ||||||||||
Total residential mortgage banking related revenue | $ | 97 | $ | 76 | $ | 21 | 27.6 | % |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(dollars are in millions) | ||||||||||||||
Salary and employee benefits | $ | 252 | $ | 280 | (28 | ) | (10.0 | ) | ||||||
Occupancy expense, net | 59 | 59 | — | — | ||||||||||
Support services from HSBC affiliates: | ||||||||||||||
Fees paid to HSBC Finance for loan servicing and other administrative support | 4 | 10 | (6 | ) | (60.0 | ) | ||||||||
Fees paid to HMUS | 52 | 73 | (21 | ) | (28.8 | ) | ||||||||
Fees paid to HTSU | 233 | 234 | (1 | ) | (.4 | ) | ||||||||
Fees paid to other HSBC affiliates | 35 | 51 | (16 | ) | (31.4 | ) | ||||||||
Total support services from HSBC affiliates | 324 | 368 | (44 | ) | (12.0 | ) | ||||||||
Other expenses: | ||||||||||||||
Equipment and software | 15 | 11 | 4 | 36.4 | ||||||||||
Marketing | 10 | 14 | (4 | ) | (28.6 | ) | ||||||||
Outside services | 22 | 20 | 2 | 10.0 | ||||||||||
Professional fees | 25 | 30 | (5 | ) | (16.7 | ) | ||||||||
Postage, printing and office supplies | 2 | 5 | (3 | ) | (60.0 | ) | ||||||||
Off-balance sheet credit reserves | 4 | (8 | ) | 12 | 100+ | |||||||||
FDIC assessment fee | 22 | 28 | (6 | ) | (21.4 | ) | ||||||||
Miscellaneous | 54 | 49 | 5 | 10.2 | ||||||||||
Total other expenses | 154 | 149 | 5 | 3.4 | ||||||||||
Total operating expenses | $ | 789 | $ | 856 | $ | (67 | ) | (7.8 | )% | |||||
Personnel - average number | 6,837 | 8,972 | ||||||||||||
Efficiency ratio | 71.9 | % | 89.7 | % |
HSBC USA Inc. |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest income | $ | 215 | $ | 247 | $ | (32 | ) | (13.0 | )% | |||||
Other operating income | 107 | 97 | 10 | 10.3 | ||||||||||
Total operating income | 322 | 344 | (22 | ) | (6.4 | ) | ||||||||
Loan impairment charges | 32 | 41 | (9 | ) | (22.0 | ) | ||||||||
290 | 303 | (13 | ) | (4.3 | ) | |||||||||
Operating expenses | 291 | 321 | (30 | ) | (9.3 | ) | ||||||||
Loss before tax | $ | (1 | ) | $ | (18 | ) | $ | 17 | 94.4 | % |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest income | $ | 170 | $ | 170 | $ | — | — | % | ||||||
Other operating income | 65 | 68 | (3 | ) | (4.4 | ) | ||||||||
Total operating income | 235 | 238 | (3 | ) | (1.3 | ) | ||||||||
Loan impairment charges (recoveries) | 14 | (17 | ) | 31 | 100+ | |||||||||
221 | 255 | (34 | ) | (13.3 | ) | |||||||||
Operating expenses | 162 | 164 | (2 | ) | (1.2 | ) | ||||||||
Profit before tax | $ | 59 | $ | 91 | $ | (32 | ) | (35.2 | )% |
| Corporate and investment banking and financing solutions for corporate and institutional clients, including loans, working capital, investment banking, trade services, payments and cash management, and leveraged and acquisition finance; and |
| One of the largest markets business of its kind, with 24-hour coverage and knowledge of world-wide local markets and providing services in credit and rates, foreign exchange, derivatives, money markets, precious metals trading, cash equities and securities services. |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest income | $ | 109 | $ | 143 | $ | (34 | ) | (23.8 | )% | |||||
Other operating income | 382 | 326 | 56 | 17.2 | ||||||||||
Total operating income | 491 | 469 | 22 | 4.7 | ||||||||||
Loan impairment charges (recoveries) | 3 | (31 | ) | 34 | 100+ | |||||||||
488 | 500 | (12 | ) | (2.4 | ) | |||||||||
Operating expenses | 230 | 259 | (29 | ) | (11.2 | ) | ||||||||
Profit before tax | $ | 258 | $ | 241 | $ | 17 | 7.1 | % |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Foreign exchange and metals | $ | 94 | $ | 126 | $ | (32 | ) | (25.4 | )% | |||||
Credit(1) | 28 | 24 | 4 | 16.7 | ||||||||||
Rates | 45 | 43 | 2 | 4.7 | ||||||||||
Equities | 3 | 5 | (2 | ) | (40.0 | ) | ||||||||
Other Global Markets | 16 | 9 | 7 | 77.8 | ||||||||||
Total Global Markets | 186 | 207 | (21 | ) | (10.1 | ) | ||||||||
Financing | 46 | 32 | 14 | 43.8 | ||||||||||
Payments and cash management | 78 | 83 | (5 | ) | (6.0 | ) | ||||||||
Other transaction services | 16 | 29 | (13 | ) | (44.8 | ) | ||||||||
Total Global Banking | 140 | 144 | (4 | ) | (2.8 | ) | ||||||||
Balance Sheet Management(2) | 165 | 118 | 47 | 39.8 | ||||||||||
Total operating income | $ | 491 | $ | 469 | $ | 22 | 4.7 | % |
(1) | Credit includes $28 million and $24 million in the three months ended March 31, 2013 and 2012, respectively, of revenue related to valuation adjustments on structured credit products which we no longer offer. |
(2) | Includes gains on the sale of securities of $131 million and $25 million in the three months ended March 31, 2013 and 2012, respectively. |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in billions) | |||||||
Client assets at beginning of the period | $ | 46.5 | $ | 47.7 | |||
Net new money | 1.1 | — | |||||
Client assets at end of period | $ | 47.6 | $ | 47.7 |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest income | $ | 45 | $ | 45 | $ | — | — | % | ||||||
Other operating income | 28 | 29 | (1 | ) | (3.4 | ) | ||||||||
Total operating income | 73 | 74 | (1 | ) | (1.4 | ) | ||||||||
Loan impairment charges (recoveries) | 1 | (2 | ) | 3 | 100+ | |||||||||
72 | 76 | (4 | ) | (5.3 | ) | |||||||||
Operating expenses | 60 | 58 | 2 | 3.4 | ||||||||||
Profit (loss) before tax | $ | 12 | $ | 18 | $ | (6 | ) | (33.3 | )% |
HSBC USA Inc. |
Increase (Decrease) | ||||||||||||||
Three Months Ended March 31, | 2013 | 2012 | Amount | % | ||||||||||
(in millions) | ||||||||||||||
Net interest expense | $ | (14 | ) | $ | (11 | ) | $ | (3 | ) | (27.3 | )% | |||
Gain (loss) on own debt designated at fair value and related derivatives | (41 | ) | (252 | ) | 211 | 83.7 | ||||||||
Other operating income (loss) | 16 | 17 | (1 | ) | (5.9 | ) | ||||||||
Total operating income (loss) | (39 | ) | (246 | ) | 207 | 84.1 | ||||||||
Loan impairment charges | — | — | — | — | ||||||||||
(39 | ) | (246 | ) | 207 | 84.1 | |||||||||
Operating expenses | 42 | 40 | 2 | 5.0 | ||||||||||
Profit (loss) before tax | $ | (81 | ) | $ | (286 | ) | $ | 205 | 71.7 | % |
HSBC USA Inc. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(dollars are in millions) | |||||||
Allowance for credit losses | $ | 568 | $ | 647 | |||
Ratio of Allowance for credit losses to: | |||||||
Loans:(1) | |||||||
Commercial | .62 | % | .72 | % | |||
Consumer: | |||||||
Residential mortgages, excluding home equity mortgages | 1.22 | % | 1.37 | % | |||
Home equity mortgages | 2.24 | % | 1.94 | % | |||
Credit card receivables | 5.61 | % | 6.75 | % | |||
Other consumer loans | 2.60 | % | 3.34 | % | |||
Total consumer loans | 1.55 | % | 1.73 | % | |||
Total | .90 | % | 1.02 | % | |||
Net charge-offs(1): | |||||||
Commercial | 114.47 | % | 220.14 | % | |||
Consumer | 175.88 | 134.69 | |||||
Total | 140.25 | % | 166.32 | % | |||
Nonperforming loans(1): | |||||||
Commercial | 81.02 | % | 63.40 | % | |||
Consumer | 26.23 | 28.16 | |||||
Total | 38.59 | % | 38.70 | % |
(1) | Ratios exclude loans held for sale as these loans are carried at the lower of cost or fair value. |
Commercial | Consumer | ||||||||||||||||||||||||||||||||||
Construction and Other Real Estate | Business and Corporate Banking | Global Banking | Other Comm’l | Residential Mortgage, Excl Home Equity Mortgages | Home Equity Mortgages | Credit Card | Other Consumer | Total | |||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2013: | |||||||||||||||||||||||||||||||||||
Allowance for credit losses – beginning of period | $ | 162 | $ | 97 | $ | 41 | $ | 17 | $ | 210 | $ | 45 | $ | 55 | $ | 20 | $ | 647 | |||||||||||||||||
Provision charged to income | 9 | 2 | (1 | ) | — | (3 | ) | 17 | (2 | ) | (1 | ) | 21 | ||||||||||||||||||||||
Charge offs | (58 | ) | (6 | ) | — | — | (16 | ) | (12 | ) | (12 | ) | (6 | ) | (110 | ) | |||||||||||||||||||
Recoveries | 3 | 3 | — | — | 1 | — | 1 | 2 | 10 | ||||||||||||||||||||||||||
Net charge offs | (55 | ) | (3 | ) | — | — | (15 | ) | (12 | ) | (11 | ) | (4 | ) | (100 | ) | |||||||||||||||||||
Allowance for credit losses – end of period | $ | 116 | $ | 96 | $ | 40 | $ | 17 | $ | 192 | $ | 50 | $ | 42 | $ | 15 | $ | 568 | |||||||||||||||||
Three Months Ended March 31, 2012: | |||||||||||||||||||||||||||||||||||
Allowance for credit losses – beginning of period | $ | 212 | $ | 78 | $ | 131 | $ | 21 | $ | 192 | $ | 52 | $ | 39 | $ | 18 | $ | 743 | |||||||||||||||||
Provision charged to income | (20 | ) | 6 | (22 | ) | (2 | ) | 15 | 8 | 11 | 4 | — | |||||||||||||||||||||||
Charge offs | (1 | ) | (10 | ) | (84 | ) | — | (26 | ) | (17 | ) | (17 | ) | (7 | ) | (162 | ) | ||||||||||||||||||
Recoveries | 14 | 2 | — | 1 | 1 | — | 2 | 2 | 22 | ||||||||||||||||||||||||||
Net charge offs | 13 | (8 | ) | (84 | ) | 1 | (25 | ) | (17 | ) | (15 | ) | (5 | ) | (140 | ) | |||||||||||||||||||
Allowance for credit losses – end of period | $ | 205 | $ | 76 | $ | 25 | $ | 20 | $ | 182 | $ | 43 | $ | 35 | $ | 17 | $ | 603 |
HSBC USA Inc. |
Amount | % of Loans to Total Loans(1) | Amount | % of Loans to Total Loans(1) | ||||||||||
March 31, 2013 | December 31, 2012 | ||||||||||||
(dollars are in millions) | |||||||||||||
Commercial(2) | $ | 269 | 69.3 | % | $ | 326 | 69.8 | % | |||||
Consumer: | |||||||||||||
Residential mortgages, excluding home equity mortgages | 192 | 25.0 | 182 | 24.3 | |||||||||
Home equity mortgages | 50 | 3.6 | 43 | 3.7 | |||||||||
Credit card receivables | 42 | 1.2 | 35 | 1.3 | |||||||||
Other consumer | 15 | .9 | 17 | 0.9 | |||||||||
Total consumer | 299 | 30.7 | 277 | 30.2 | |||||||||
Total | $ | 568 | 100.0 | % | $ | 603 | 100.0 | % |
(1) | Excluding loans held for sale. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
On-balance sheet commercial allowance: | |||||||
Specific | $ | 34 | $ | 94 | |||
Collective | 235 | 223 | |||||
Total on-balance sheet commercial allowance | 269 | 317 | |||||
Off-balance sheet commercial allowance | 145 | 139 | |||||
Total commercial allowances | $ | 414 | $ | 456 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(dollars are in millions) | |||||||
Delinquent loans: | |||||||
Commercial | $ | 160 | $ | 339 | |||
Consumer: | |||||||
Residential mortgages, excluding home equity mortgages(1) | 1,158 | 1,233 | |||||
Home equity mortgages | 85 | 75 | |||||
Total residential mortgages(2) | 1,243 | 1,308 | |||||
Credit card receivables | 18 | 21 | |||||
Other consumer | 24 | 30 | |||||
Total consumer | 1,285 | 1,359 | |||||
Total | $ | 1,445 | $ | 1,698 | |||
Delinquency ratio: | |||||||
Commercial | .37 | % | .76 | % | |||
Consumer: | |||||||
Residential mortgages, excluding home equity mortgages | 7.23 | % | 7.78 | % | |||
Home equity mortgages | 3.80 | 3.23 | |||||
Total residential mortgages(2) | 6.81 | 7.20 | |||||
Credit card receivables | 2.40 | 2.58 | |||||
Other consumer | 3.74 | 4.25 | |||||
Total consumer | 6.54 | 6.92 | |||||
Total | 2.29 | % | 2.64 | % |
(1) | At March 31, 2013 and December 31, 2012, residential mortgage loan delinquency includes $1.1 billion and $1.0 billion, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less costs to sell, including $35 million and $39 million, respectively, relating to loans held for sale. |
March 31, 2013 | December 31, 2012 | ||||||
(dollars are in millions) | |||||||
Dollars of delinquent loans: | |||||||
Interest-only loans | $ | 74 | $ | 87 | |||
ARM loans | 337 | 356 | |||||
Delinquency ratio: | |||||||
Interest-only loans | 1.92 | % | 2.18 | % | |||
ARM loans | 3.24 | 3.43 |
HSBC USA Inc. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
(dollars are in millions) | |||||||||||
Net Charge-off Dollars: | |||||||||||
Commercial: | |||||||||||
Construction and other real estate | $ | 55 | $ | 22 | $ | (13 | ) | ||||
Business and corporate banking | 3 | 4 | 8 | ||||||||
Global banking | — | 20 | 84 | ||||||||
Other commercial | — | — | (1 | ) | |||||||
Total commercial | 58 | 46 | 78 | ||||||||
Consumer: | |||||||||||
Residential mortgages, excluding home equity mortgages | 15 | 32 | 25 | ||||||||
Home equity mortgages | 12 | 14 | 17 | ||||||||
Total residential mortgages | 27 | 46 | 42 | ||||||||
Credit card receivables | 11 | 11 | 15 | ||||||||
Other consumer | 4 | 7 | 5 | ||||||||
Total consumer | 42 | 64 | 62 | ||||||||
Total | $ | 100 | $ | 110 | $ | 140 | |||||
Net Charge-off Ratio: | |||||||||||
Commercial: | |||||||||||
Construction and other real estate | 2.62 | % | 1.05 | % | (.67 | )% | |||||
Business and corporate banking | .13 | .13 | .30 | ||||||||
Global banking | — | .41 | 2.49 | ||||||||
Other commercial | — | — | (.13 | ) | |||||||
Total commercial | .55 | .42 | .90 | ||||||||
Consumer: | |||||||||||
Residential mortgages, excluding home equity mortgages | .40 | .83 | .71 | ||||||||
Home equity mortgages | 2.15 | 2.38 | 2.69 | ||||||||
Total residential mortgages | .62 | 1.04 | 1.01 | ||||||||
Credit card receivables | 5.84 | 5.54 | 7.47 | ||||||||
Other consumer | 2.71 | 4.61 | 2.81 | ||||||||
Total consumer | .89 | 1.34 | 1.36 | ||||||||
Total | .65 | % | .70 | % | 1.06 | % |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(dollars are in millions) | |||||||
Nonaccrual loans: | |||||||
Commercial: | |||||||
Real Estate: | |||||||
Construction and land loans | $ | 47 | $ | 104 | |||
Other real estate | 218 | 281 | |||||
Business and corporate banking | 30 | 47 | |||||
Global banking | 18 | 18 | |||||
Other commercial | 14 | 13 | |||||
Total commercial | 327 | 463 | |||||
Consumer: | |||||||
Residential mortgages, excluding home equity mortgages | 1,026 | 1,038 | |||||
Home equity mortgages | 74 | 86 | |||||
Total residential mortgages(1)(2) | 1,100 | 1,124 | |||||
Others | 5 | 5 | |||||
Total consumer loans | 1,105 | 1,129 | |||||
Nonaccrual loans held for sale | 34 | 37 | |||||
Total nonaccruing loans | 1,466 | 1,629 | |||||
Accruing loans contractually past due 90 days or more: | |||||||
Commercial: | |||||||
Real Estate: | |||||||
Construction and land loans | $ | — | $ | — | |||
Other real estate | 2 | 8 | |||||
Business and corporate banking | 2 | 28 | |||||
Other commercial | 1 | 1 | |||||
Total commercial | 5 | 37 | |||||
Consumer: | |||||||
Credit card receivables | 13 | 15 | |||||
Other consumer | 22 | 28 | |||||
Total consumer loans | 35 | 43 | |||||
Total accruing loans contractually past due 90 days or more | 40 | 80 | |||||
Total nonperforming loans | 1,506 | 1,709 | |||||
Other real estate owned | 88 | 80 | |||||
Total nonperforming assets | $ | 1,594 | $ | 1,789 | |||
Allowance for credit losses as a percent of nonperforming loans(3): | |||||||
Commercial | 81.02 | % | 63.40 | % | |||
Consumer | 26.23 | 28.16 |
(1) | At March 31, 2013 and December 31, 2012, residential mortgage loan nonaccrual balances include $1.1 billion and $1.0 billion, respectively, of loans that are carried at the lower of amortized cost or fair value less cost to sell. |
(2) | Nonaccrual residential mortgages includes all receivables which are 90 or more days contractually delinquent as well as second lien loans where the first lien loan that we own or service is 90 or more days contractually delinquent. |
(3) | Represents our commercial or consumer allowance for credit losses, as appropriate, divided by the corresponding outstanding balance of total nonperforming loans held for investment. Nonperforming loans include accruing loans contractually past due 90 days or more. Ratio excludes nonperforming loans associated with loan portfolios which are considered held for sale as these loans are carried at the lower of amortized cost or fair value. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Impaired commercial loans: | |||||||
Balance at end of period | $ | 532 | $ | 697 | |||
Amount with impairment reserve | 131 | 250 | |||||
Impairment reserve | 35 | 96 |
• | Special Mention – generally includes loans that are protected by collateral and/or the credit worthiness of the customer, but are potentially weak based upon economic or market circumstances which, if not checked or corrected, could weaken our credit position at some future date. |
• | Substandard – includes loans that are inadequately protected by the underlying collateral and/or general credit worthiness of the customer. These loans present a distinct possibility that we will sustain some loss if the deficiencies are not corrected. This category also includes certain non-investment grade securities, as required by our principal regulator. |
• | Doubtful – includes loans that have all the weaknesses exhibited by substandard loans, with the added characteristic that the weaknesses make collection or liquidation in full of the recorded loan highly improbable. However, although the possibility of loss is extremely high, certain factors exist which may strengthen the credit at some future date, and therefore the decision to charge off the loan is deferred. Loans graded as doubtful are required to be placed in nonaccruing status. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Special mention: | |||||||
Commercial loans | $ | 1,144 | $ | 1,125 | |||
Substandard: | |||||||
Commercial loans | 810 | 916 | |||||
Consumer loans | 1,001 | 1,031 | |||||
Total substandard | 1,811 | 1,947 | |||||
Doubtful: | |||||||
Commercial loans | 40 | 117 | |||||
Total | $ | 2,995 | $ | 3,189 |
HSBC USA Inc. |
Commercial Construction and Other Real Estate Loans | Residential Mortgage Loans | Credit Card Receivables | ||||||
New York State | 40.6 | % | 34.1 | % | 56.9 | % | ||
North Central United States | 4.7 | 6.4 | 3.7 | |||||
North Eastern United States | 10.2 | 9.3 | 12.1 | |||||
Southern United States | 23.0 | 15.9 | 13.9 | |||||
Western United States | 21.5 | 34.0 | 11.1 | |||||
Others | — | .3 | 2.3 | |||||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
• | volatility of interest rates, currencies, equity or corporate reference entity used as the basis for determining contract payments; |
• | current market events or trends; |
• | country risk; |
• | maturity and liquidity of contracts; |
• | credit worthiness of the counterparties in the transaction; |
• | the existence of a master netting agreement among the counterparties; and |
• | existence and value of collateral received from counterparties to secure exposures. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Risk associated with derivative contracts: | |||||||
Total credit risk exposure | $ | 42,504 | $ | 41,248 | |||
Less: collateral held against exposure | 6,087 | 7,530 | |||||
Net credit risk exposure | $ | 36,417 | $ | 33,718 |
Three Months Ended March 31, | 2013 | 2012 | |||||
(in millions) | |||||||
Long-term debt issued | $ | 1,965 | $ | 3,436 | |||
Long-term debt retired | (1,707 | ) | (848 | ) | |||
Net long-term debt issued | $ | 258 | $ | 2,588 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||
Tier 1 capital to risk weighted assets | 12.74 | % | 13.61 | % | |
Tier 1 common equity to risk weighted assets | 10.91 | 11.63 | |||
Total capital to risk weighted assets | 18.11 | 19.52 | |||
Tier 1 capital to average assets | 8.00 | 7.70 | |||
Total equity to total assets | 9.24 | 9.07 |
HSBC USA Inc. |
Actual January 1 through March 31, 2013 | Estimated April 1 through December 31, 2013 | Estimated Full Year 2013 | |||||||||
(in billions) | |||||||||||
Funding needs: | |||||||||||
Net loan growth | $ | 1 | $ | 5 | $ | 6 | |||||
Long-term debt maturities | 2 | 1 | 3 | ||||||||
Total funding needs | $ | 3 | $ | 6 | $ | 9 | |||||
Funding sources: | |||||||||||
Net change in short-term investments | $ | 1 | $ | — | $ | 1 | |||||
Long-term debt issuance | 2 | 6 | 8 | ||||||||
Total funding sources | $ | 3 | $ | 6 | $ | 9 |
HSBC USA Inc. |
Balance at March 31, 2013 | |||||||||||||||||||
One Year or Less | Over One through Five Years | Over Five Years | Total | Balance at December 31, 2012 | |||||||||||||||
(in billions) | |||||||||||||||||||
Standby letters of credit, net of participations(1) | $ | 5.3 | $ | 2.8 | $ | — | $ | 8.1 | $ | 8.4 | |||||||||
Commercial letters of credit | .9 | .1 | — | 1.0 | 1.0 | ||||||||||||||
Credit derivatives(2) | 58.0 | 152.6 | 18.6 | 229.2 | 237.5 | ||||||||||||||
Other commitments to extend credit: | |||||||||||||||||||
Commercial | 14.4 | 41.3 | 4.0 | 59.7 | 57.7 | ||||||||||||||
Consumer | 6.9 | — | — | 6.9 | 7.0 | ||||||||||||||
Total | $ | 85.5 | $ | 196.8 | $ | 22.6 | $ | 304.9 | $ | 311.6 |
(1) | Includes $840 million and $808 million issued for the benefit of HSBC affiliates at March 31, 2013 and December 31, 2012, respectively. |
(2) | Includes $42.4 billion and $44.2 billion issued for the benefit of HSBC affiliates at March 31, 2013 and December 31, 2012, respectively. |
HSBC USA Inc. |
Conduit Assets(1) | Conduit Funding(1) | ||||||||||||||||
Conduit Type | Maximum Exposure to Loss | Total Assets | Weighted Average Life (Months) | Commercial Paper | Weighted Average Life (Days) | ||||||||||||
(dollars are in millions) | |||||||||||||||||
HSBC affiliate sponsored (multi-seller) | $ | 2,155 | $ | 1,420 | 9 | $ | 1,420 | 18 | |||||||||
Third-party sponsored: | |||||||||||||||||
Single-seller | 299 | 5,952 | 42 | 5,732 | 60 | ||||||||||||
Total | $ | 2,454 | $ | 7,372 | $ | 7,152 |
(1) | For multi-seller conduits, the amounts presented represent only the specific assets and related funding supported by our liquidity facilities. For single-seller conduits, the amounts presented represent the total assets and funding of the conduit. |
Average Asset Mix | Average Credit Quality(1) | ||||||||||||||||
Asset Class | AAA | AA+/AA | A | A– | BB/BB– | ||||||||||||
Multi-seller conduits | |||||||||||||||||
Debt securities backed by: | |||||||||||||||||
Auto loans and leases | 24 | % | 34 | % | — | % | — | % | — | % | — | % | |||||
Trade receivables | 16 | — | 100 | 24 | — | — | |||||||||||
Credit card receivables | 15 | — | — | 76 | — | — | |||||||||||
Equipment loans | 45 | 66 | — | — | — | — | |||||||||||
100 | % | 100 | % | 100 | % | 100 | % | — | % | — | % |
(1) | Credit quality is based on Standard and Poor’s ratings at March 31, 2013 except for loans and trade receivables held by single-seller conduits, which are based on our internal ratings. For the single-seller conduits, external ratings are not available; however, our internal credit ratings were developed using similar methodologies and rating scales equivalent to the external credit ratings. |
HSBC USA Inc. |
• | whether the asset or liability is transacted in an active market with a quoted market price; |
• | the level of bid-ask spreads; |
• | a lack of pricing transparency due to, among other things, complexity of the product and market liquidity; |
• | whether only a few transactions are observed over a significant period of time; |
• | whether the pricing quotations vary substantially among independent pricing services; |
• | whether inputs to the valuation techniques can be derived from or corroborated with market data; and |
• | whether significant adjustments are made to the observed pricing information or model output to determine the fair value. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(dollars are in millions) | |||||||
Level 3 assets(1)(2) | $ | 4,154 | $ | 4,701 | |||
Total assets measured at fair value(3) | 173,916 | 189,449 | |||||
Level 3 liabilities | 4,276 | 3,854 | |||||
Total liabilities measured at fair value(1) | 110,547 | 116,728 | |||||
Level 3 assets as a percent of total assets measured at fair value | 2.4 | % | 2.5 | % | |||
Level 3 liabilities as a percent of total liabilities measured at fair value | 3.9 | % | 3.3 | % |
(1) | Presented without netting which allows the offsetting of amounts relating to certain contracts if certain conditions are met. |
(2) | Includes $4.0 billion of recurring Level 3 assets and $191 million of non-recurring Level 3 assets at March 31, 2013. Includes $4.5 billion of recurring Level 3 assets and $222 million of non-recurring Level 3 assets at December 31, 2012. |
(3) | Includes $173.7 billion of assets measured on a recurring basis and $227 million of assets measured on a non-recurring basis at March 31, 2013. Includes $189.2 billion of assets measured on a recurring basis and $256 million of assets measured on a non-recurring basis at December 31, 2012. |
HSBC USA Inc. |
Commercial Mortgages | Prime | Alt-A | Subprime | |||||||||||||||||||||||||||||||||
Year of Issuance: | Total | Prior to 2006 | 2006 to Present | Prior to 2006 | 2006 to Present | Prior to 2006 | 2006 to Present | Prior to 2006 | 2006 to Present | |||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||
Rating of securities:(1) | Collateral type: | |||||||||||||||||||||||||||||||||||
AAA | Residential mortgages | $ | 280 | $ | 52 | $ | 133 | $ | — | $ | — | $ | 88 | $ | — | $ | 7 | $ | — | |||||||||||||||||
AA | Residential mortgages | 9 | — | — | — | — | 9 | — | — | — | ||||||||||||||||||||||||||
A | Residential mortgages | 91 | — | — | — | — | 30 | — | — | 61 | ||||||||||||||||||||||||||
Home equity loans | 111 | — | — | — | — | — | 111 | — | — | |||||||||||||||||||||||||||
Total A | 202 | — | — | — | — | 30 | 111 | — | 61 | |||||||||||||||||||||||||||
BBB | Residential mortgages | 2 | — | — | — | — | 2 | — | — | — | ||||||||||||||||||||||||||
Other | 85 | — | — | — | — | 85 | — | — | — | |||||||||||||||||||||||||||
Total BBB | 87 | — | — | — | — | 87 | — | — | — | |||||||||||||||||||||||||||
B | Home equity loans | 79 | — | — | — | — | — | 79 | — | — | ||||||||||||||||||||||||||
CCC | Home equity loans | 65 | — | — | — | — | — | 65 | — | — | ||||||||||||||||||||||||||
Residential mortgages | 3 | — | — | — | — | — | — | — | 3 | |||||||||||||||||||||||||||
Total CCC | 68 | — | — | — | — | — | 65 | — | 3 | |||||||||||||||||||||||||||
Unrated | Residential mortgages | 1 | — | — | — | — | 1 | — | — | — | ||||||||||||||||||||||||||
$ | 726 | $ | 52 | $ | 133 | $ | — | $ | — | $ | 215 | $ | 255 | $ | 7 | $ | 64 |
Credit quality of collateral: | Total | A or Higher | BBB | BB/B | CCC | Unrated | ||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Rating of securities:(1) | Collateral type: | |||||||||||||||||||||||
Corporate loans | $ | 303 | $ | — | $ | — | $ | 303 | $ | — | $ | — | ||||||||||||
Trust preferred | 178 | — | 178 | — | — | — | ||||||||||||||||||
Others | 64 | 64 | — | — | — | — | ||||||||||||||||||
$ | 545 | $ | 64 | $ | 178 | $ | 303 | $ | — | $ | — | |||||||||||||
Total asset-backed securities | $ | 1,271 |
HSBC USA Inc. |
• | Credit risk is the potential that a borrower or counterparty will default on a credit obligation, as well as the impact on the value of credit instruments due to changes in the probability of borrower default; Credit risk includes risk associated with cross-border exposures. |
• | Liquidity risk is the potential that an institution will be unable to meet its obligations as they become due or fund its customers because of inadequate cash flow or the inability to liquidate assets or obtain funding itself; |
• | Interest rate risk is the potential impairment of net interest income due to mismatched pricing between assets and liabilities as well as losses in value due to rate movements; |
• | Market risk is the risk that movements in market risk factors, including foreign exchange rates and commodity prices, interest rates, credit spreads and equity prices, will reduce HSBC USA’s income or the value of its portfolios; |
• | Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, or systems, or from external events (including legal risk but excluding strategic and reputational risk); |
• | Compliance risk is the risk that we fail to observe the letter and spirit of all relevant laws, codes, rules, regulations, regulatory requirements and standards of good market practice, and incur fines and penalties and suffer damage to our business as a consequence; |
• | Fiduciary risk is the risk of breaching fiduciary duties where we act in a fiduciary capacity as trustee, investment manager or as mandated by law or regulation. |
• | Reputational risk is the risk arising from a failure to safeguard our reputation by maintaining the highest standards of conduct at all times and by being aware of issues, activities and associations that might pose a threat to the reputation of HSBC locally, regionally or internationally; |
• | Strategic risk is the risk that the business will fail to identify, execute, and react appropriately to opportunities and/or threats arising from changes in the market, some of which may emerge over a number of years such as changing economic and political circumstances, customer requirements, demographic trends, regulatory developments or competitor action; |
• | Security and Fraud risk is the risk to the business from terrorism, crime, incidents/disasters, and groups hostile to HSBC interests; |
• | Model risk is the risk of incorrect implementation or inappropriate application of models. Model risk occurs when a model does not properly capture risk(s) or perform functions as designed; and |
• | Pension risk is the risk that the cash flows associated with pension assets will not be enough to cover the pension benefit obligations required to be paid. |
HSBC USA Inc. |
• | loan portfolios; |
• | investment portfolios; |
• | unfunded commitments such as letters of credit and lines of credit that customers can draw upon; and |
• | treasury instruments, such as interest rate swaps which, if more valuable today than when originally contracted, may represent an exposure to the counterparty to the contract. |
• | volatility of interest rates, currencies, equity or corporate reference entity used as the basis for determining contract payments; |
• | current market events or trends; |
• | country risk; |
• | maturity and liquidity of contracts; |
• | credit worthiness of the counterparties in the transaction; |
• | the existence of a master netting agreement among the counterparties; and |
• | existence and value of collateral received from counterparties to secure exposures. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Risk associated with derivative contracts: | |||||||
Total credit risk exposure | $ | 42,504 | $ | 41,248 | |||
Less: collateral held against exposure | 6,087 | 7,530 | |||||
Net credit risk exposure | $ | 36,417 | $ | 33,718 |
Moody’s | S&P | Fitch | DBRS(1) | |
HSBC USA Inc.: | ||||
Short-term borrowings | P-1 | A-1 | F1+ | R-1 (middle) |
Long-term/senior debt | A2 | A+ | AA- | AA (low) |
HSBC Bank USA: | ||||
Short-term borrowings | P-1 | A-1+ | F1+ | R-1 (middle) |
Long-term/senior debt | A1 | AA- | AA- | AA (low) |
(1) | Dominion Bond Rating Service. |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Institutional PVBP movement limit | $ | 8.0 | $ | 8.0 | |||
PVBP position at period end | 3.6 | 1.7 |
March 31, 2013 | December 31, 2012 | ||||
(values as a percentage) | |||||
Institutional economic value of equity limit | +/–15 | +/–15 | |||
Projected change in value (reflects projected rate movements on January 1): | |||||
Change resulting from an immediate 200 basis point increase in interest rates | 4 | 1 | |||
Change resulting from an immediate 200 basis point decrease in interest rates | (13 | ) | (10 | ) |
March 31, 2013 | December 31, 2012 | ||||||||||||
Amount | % | Amount | % | ||||||||||
(dollars are in millions) | |||||||||||||
Projected change in net interest income (reflects projected rate movements on January 1): | |||||||||||||
Institutional base earnings movement limit | (10 | ) | (10 | ) | |||||||||
Change resulting from a gradual 100 basis point increase in the yield curve | $ | 80 | 4 | $ | 107 | 5 | |||||||
Change resulting from a gradual 100 basis point decrease in the yield curve | (200 | ) | (10 | ) | (155 | ) | (8 | ) | |||||
Change resulting from a gradual 200 basis point increase in the yield curve | 100 | 5 | 128 | 6 | |||||||||
Change resulting from a gradual 200 basis point decrease in the yield curve | (279 | ) | (13 | ) | (210 | ) | (10 | ) | |||||
Other significant scenarios monitored (reflects projected rate movements on January 1): | |||||||||||||
Change resulting from an immediate 100 basis point increase in the yield curve | 142 | 7 | 182 | 9 | |||||||||
Change resulting from an immediate 100 basis point decrease in the yield curve | (283 | ) | (13 | ) | (200 | ) | (10 | ) | |||||
Change resulting from an immediate 200 basis point increase in the yield curve | 147 | 7 | 158 | 8 | |||||||||
Change resulting from an immediate 200 basis point decrease in the yield curve | (327 | ) | (16 | ) | (234 | ) | (12 | ) |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||||||
Actual | Proforma(1) | Actual | Proforma(1) | ||||||||
Tangible common equity to tangible assets | 6.98 | % | 6.92 | % | 6.79 | % | 6.72 | % | |||
Tangible common equity to risk weighted assets | 11.53 | 11.42 | 12.39 | 12.26 |
(1) | Proforma percentages reflect a 25 basis point increase in interest rates. |
March 31, 2013 | Three Months Ended March 31, 2013 | December 31, 2012 | |||||||||||||||||
Minimum | Maximum | Average | |||||||||||||||||
(in millions) | |||||||||||||||||||
Total trading | $ | 8 | $ | 6 | $ | 13 | $ | 9 | $ | 8 | |||||||||
Foreign exchange | 4 | 4 | 9 | 6 | 5 | ||||||||||||||
Interest rate directional and credit spread | 10 | 7 | 15 | 10 | 6 |
HSBC USA Inc. |
Ranges of daily trading revenue earned from market risk-related activities | Below $(5) | $(5) to $0 | $0 to $5 | $5 to $10 | Over $10 | ||||||
(dollars are in millions) | |||||||||||
Number of trading days market risk-related revenue was within the stated range | — | 27 | 31 | 2 | — |
March 31, 2013 | Three Months Ended March 31, 2013 | December 31, 2012 | |||||||||||||||||
Minimum | Maximum | Average | |||||||||||||||||
(in millions) | |||||||||||||||||||
Total Accrual VAR | $ | 78 | $ | 78 | $ | 95 | $ | 88 | $ | 92 |
HSBC USA Inc. |
March 31, 2013 | December 31, 2012 | ||||||
(in millions) | |||||||
Projected change in net market value of hedged MSRs portfolio (reflects projected rate movements on April 1 and January 1): | |||||||
Value of hedged MSRs portfolio | $ | 190 | $ | 168 | |||
Change resulting from an immediate 50 basis point decrease in the yield curve: | |||||||
Change limit (no worse than) | (20 | ) | (20 | ) | |||
Calculated change in net market value | 4 | 4 | |||||
Change resulting from an immediate 50 basis point increase in the yield curve: | |||||||
Change limit (no worse than) | (8 | ) | (8 | ) | |||
Calculated change in net market value | 6 | 8 | |||||
Change resulting from an immediate 100 basis point increase in the yield curve: | |||||||
Change limit (no worse than) | (12 | ) | (12 | ) | |||
Calculated change in net market value | 12 | 28 |
Ranges of mortgage economic value from market risk-related activities | Below $(2) | $(2) to $0 | $0 to $2 | $2 to $4 | Over $4 | |||||||||
(dollars are in millions) | ||||||||||||||
Number of trading weeks market risk-related revenue was within the stated range | — | 4 | 8 | 1 | — |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||||||||||||||||
Balance | Interest | Rate(1) | Balance | Interest | Rate(1) | ||||||||||||||||
(dollars are in millions) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Interest bearing deposits with banks | $ | 17,383 | $ | 11 | .26 | % | $ | 22,804 | $ | 16 | .29 | % | |||||||||
Federal funds sold and securities purchased under resale agreements | 1,910 | 3 | .50 | 3,286 | 10 | 1.19 | |||||||||||||||
Trading assets | 11,463 | 24 | .83 | 13,387 | 33 | .99 | |||||||||||||||
Securities | 62,445 | 233 | 1.52 | 56,562 | 309 | 2.20 | |||||||||||||||
Loans: | |||||||||||||||||||||
Commercial | 43,311 | 273 | 2.56 | 35,988 | 244 | 2.72 | |||||||||||||||
Consumer: | |||||||||||||||||||||
Residential mortgages | 15,758 | 146 | 3.76 | 15,342 | 150 | 3.93 | |||||||||||||||
HELOCs and home equity mortgages | 2,278 | 19 | 3.33 | 3,380 | 29 | 3.46 | |||||||||||||||
Credit cards | 771 | 18 | 9.25 | 1,202 | 23 | 8.19 | |||||||||||||||
Auto finance | — | — | — | — | — | — | |||||||||||||||
Other consumer | 655 | 8 | 5.39 | 934 | 16 | 7.06 | |||||||||||||||
Total consumer | 19,462 | 191 | 3.99 | 20,858 | 218 | 4.24 | |||||||||||||||
Total loans | 62,773 | 464 | 3.00 | 56,846 | 462 | 3.28 | |||||||||||||||
Other | 3,223 | 10 | 1.37 | 3,885 | 11 | 1.17 | |||||||||||||||
Total earning assets | 159,197 | $ | 745 | 1.90 | % | 156,770 | $ | 841 | 2.16 | % | |||||||||||
Allowance for credit losses | (633 | ) | (727 | ) | |||||||||||||||||
Cash and due from banks | 1,126 | 1,595 | |||||||||||||||||||
Other assets | 28,760 | 29,888 | |||||||||||||||||||
Assets of discontinued operations | — | 20,410 | |||||||||||||||||||
Total assets | $ | 188,450 | $ | 207,936 | |||||||||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||||
Deposits in domestic offices: | |||||||||||||||||||||
Savings deposits | $ | 44,563 | $ | 19 | .18 | % | $ | 58,583 | $ | 59 | .41 | % | |||||||||
Other time deposits | 21,048 | 21 | .40 | 14,880 | 35 | .93 | |||||||||||||||
Deposits in foreign offices: | |||||||||||||||||||||
Foreign banks deposits | 7,685 | 1 | .07 | 8,165 | 1 | .07 | |||||||||||||||
Other interest bearing deposits | 6,080 | 2 | .11 | 15,661 | 4 | .11 | |||||||||||||||
Deposits held for sale | — | — | — | 15,091 | 10 | .25 | |||||||||||||||
Total interest bearing deposits | 79,376 | 43 | .22 | 112,380 | 109 | .45 | |||||||||||||||
Short-term borrowings | 16,193 | 9 | .22 | 17,725 | 9 | .19 | |||||||||||||||
Long-term debt | 22,075 | 167 | 3.07 | 18,089 | 161 | 3.59 | |||||||||||||||
Total interest bearing deposits and debt | 117,644 | 219 | 148,194 | 279 |
HSBC USA Inc. |
Three Months Ended March 31, | 2013 | 2012 | |||||||||||||||||||
Balance | Interest | Rate(1) | Balance | Interest | Rate(1) | ||||||||||||||||
(dollars are in millions) | |||||||||||||||||||||
Other | 494 | 16 | 12.69 | 422 | 12 | 11.14 | |||||||||||||||
Total interest bearing liabilities | 118,138 | 235 | .81 | 148,616 | 291 | .88 | |||||||||||||||
Net interest income/Interest rate spread | $ | 510 | 1.09 | % | $ | 550 | 1.29 | % | |||||||||||||
Noninterest bearing deposits | 31,115 | 20,312 | |||||||||||||||||||
Other liabilities | 21,381 | 19,428 | |||||||||||||||||||
Liabilities of discontinued operations | — | 934 | |||||||||||||||||||
Total shareholders’ equity | 17,816 | 18,646 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 188,450 | $ | 207,936 | |||||||||||||||||
Net interest margin on average earning assets | 1.30 | % | 1.42 | % | |||||||||||||||||
Net interest income to average total assets | 1.10 | % | 1.18 | % |
(1) | Rates are calculated on amounts that have not been rounded to the nearest million. |
HSBC USA Inc. |
HSBC USA Inc. |
| HSBC maintains a frozen account in the U.K. for an Iranian-owned, FSA-regulated financial institution. In April 2007, the U.K. government issued a license to allow HSBC to handle certain transactions (operational payments and settlement of pre-sanction transactions) for this institution. There was some licensed activity in the first quarter of 2013. |
| HSBC acts as the trustee and administrator for pension schemes involving three employees of a U.S.-sanctioned Iranian bank in Hong Kong. Under the rules of these schemes, HSBC accepts contributions from the Iranian bank each month and allocates the funds into the pension accounts of the three Iranian bank employees. HSBC runs and operates these schemes in accordance with Hong Kong laws and regulations. |
HSBC USA Inc. |
| In 2010, HSBC closed its representative office in Iran. HSBC maintains a local account with a U.S.-sanctioned Iranian bank in Tehran in order to facilitate residual activity related to the closure. There was no activity in the first quarter of 2013. |
HSBC USA Inc. |
12 | Computation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends. |
31 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document(1,2) |
101.SCH | XBRL Taxonomy Extension Schema Document(1,2) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document(1,2) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document(1,2) |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document(1,2) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document(1,2) |
1. | Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in HSBC USA Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in eXentsible Business Reporting Language (“XBRL”) interactive data files: (i) the Consolidated Statement of Income for the three months ended March 31, 2013 and 2012, (ii) the Consolidated Statement of Comprehensive Income for the three months ended March 31, 2013 and 2012, (iii) the Consolidated Balance Sheet as of March 31, 2013 and December 31. 2012, (iv) the Consolidated Statement of Changes in Shareholders' Equity for the three months ended March 31, 2013 and 2012, (v) the Consolidated Statement of Cash Flows for the three months ended March 31, 2013 and 2012, and (vi) the Notes to Consolidated Financial Statements. |
2. | As provided in Rule 406T of Regulation S-T, this information shall be not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections. |
HSBC USA Inc. |
Assets: | Equity: |
by business segment 50 | consolidated statement of changes 7 |
consolidated average balances 138 | ratios 55, 92, 124 |
fair value measurements 63 | Equity securities available-for-sale 13 |
nonperforming 21, 27, 28, 120 | Estimates and assumptions 10 |
trading 12, 99 | Eurozone exposures 122 |
Asset-backed commercial paper conduits 57 | Executive overview 88 |
Asset-backed securities 13,76,130 | Fair value measurements: |
Balance sheet: | assets and liabilities recorded at fair value on a recurring basis 66 |
consolidated 5 | assets and liabilities recorded at fair value on a non-recurring basis 74 |
consolidated average balances 138 | control over valuation process 128 |
review 96 | financial instruments 64 |
Basel II 124 | hierarchy 64, 128 |
Basel III 124 | transfers into/out of level one and two 69, 129 |
Basis of reporting 94 | transfers into/out of level two and three 73, 130 |
Business: | valuation techniques 75 |
consolidated performance review 89 | Fiduciary risk 131, 137 |
Capital: | Financial assets: |
2013 funding strategy 125 | designated at fair value 41 |
common equity movements 124 | reclassification under IFRSs 51,94 |
consolidated statement of changes 7 | Financial highlights metrics 92 |
regulatory capital 55 | Financial liabilities: |
selected capital ratios 55, 92, 124 | designated at fair value 41 |
Cash flow (consolidated) 8 | fair value of financial liabilities 65 |
Cautionary statement regarding forward-looking statements 88 | Forward looking statements 88 |
Collateral — pledged assets 62 | Funding 125 |
Collateralized debt obligations 76, 130 | Gain on instruments designated at fair value and related derivatives 42 |
Commercial banking segment results (IFRSs) 54, 109 | Gains (losses) from securities 17, 105 |
Compliance risk 131, 137 | Global Banking and Markets 54, 115 |
Controls and procedures 140 | Geographic concentration of receivables 122 |
Credit card fees 104 | Goodwill 33 |
Credit quality 113 | Guarantee arrangements 58 |
Credit risk: | Impairment: |
adjustment 63 | available-for-sale securities 16 |
component of fair value option 42 | credit losses 29, 103, 115 |
concentration 28 | nonperforming loans 120 |
exposure 133 | impaired loans 121 |
management 132 | Income (loss) from financial instruments designated at fair value, net 42 |
related contingent features 38 | Income tax expenses 43 |
related arrangements 64 | Intangible assets 32 |
Current environment 88 | Interest rate risk 131, 133 |
Deferred tax assets 43 | Internal control 140 |
Deposits 100, 103, 123 | Key performance indicators 92 |
Derivatives: | Legal proceedings 140 |
cash flow hedges 35 | Leveraged finance transactions 41 |
fair value hedges 34 | Liabilities: |
notional value 39 | commitments, lines of credit 126 |
trading and other 36 | deposits 100, 103, 123 |
Discontinued operations 11 | financial liabilities designated at fair value 41 |
HSBC USA Inc. |
long-term debt 100 | financial 92 |
short-term borrowings 100 | loans-to-deposits 92 |
trading 12, 99 | Residential real estate owned 101 |
Liquidity and capital resources 123 | Reconciliation of U.S. GAAP results to IFRSs 94 |
Liquidity risk 131, 133 | Refreshed loan-to-value 98 |
Litigation and regulatory matters 79 | Regulation 55,125 |
Loans: | Related party transactions 46 |
by category 19, 97 | Reputational risk 131, 137 |
by charge-off (net) 30, 115 | Results of operations 102 |
by delinquency 28, 117 | Retail banking and wealth management segment results (IFRSs) 54, 108 |
criticized assets 26, 121 | Risk elements in the loan portfolio 28 |
geographic concentration 122 | Risk management: |
held for sale 31 | credit 132 |
impaired 21, 121 | compliance 137 |
nonperforming 27, 28, 120 | fiduciary 137 |
overall review 97 | interest rate 133 |
purchases from HSBC Finance 48 | liquidity 133 |
risk concentration 28 | market 135 |
troubled debt restructures 21 | operational 137 |
Loan impairment charges — see Provision for credit losses | reputational 137 |
Loan-to-deposits ratio 92 | strategic 137 |
Market risk 131, 135 | Securities: |
Market turmoil: | fair value 13 |
exposures 133 | impairment 16 |
impact on liquidity risk 123 | maturity analysis 18 |
Monoline insurers 17, 90, 112 | Segment results — IFRSs basis: |
Mortgage lending products 19, 97 | retail banking and wealth management 54, 108 |
Mortgage servicing rights 32 | commercial banking 54, 109 |
Net interest income 102 | global banking and markets 54, 110 |
New accounting pronouncements 87 | private banking 54, 112 |
Off balance sheet arrangements 125 | other 54, 113 |
Operating expenses 107 | overall summary 108 |
Operational risk 131, 137 | Selected financial data 92 |
Other revenue 104 | Sensitivity: |
Other segment results (IFRSs) 54, 113 | projected net interest income 134 |
Pension and other postretirement benefits 46 | Statement of changes in shareholders’ equity 7 |
Performance, developments and trends 89 | Statement of changes in comprehensive income 4 |
Pledged assets 62 | Statement of income 3 |
Private banking segment results (IFRSs) 54, 112 | Strategic risk 131, 137 |
Profit (loss) before tax: | Stress testing 123, 125 |
by segment — IFRSs 54 | Table of contents 2 |
consolidated 3 | Tax expense 43 |
Provision for credit losses 103 | Trading: |
Ratios: | assets 12, 99 |
capital 55, 92, 124 | derivatives 12, 99 |
charge-off (net) 119 | liabilities 12, 99 |
credit loss reserve related 115 | portfolios 12 |
delinquency 28, 117 | Trading revenue (net) 105 |
earnings to fixed charges — Exhibit 12 | Troubled debt restructures 21 |
efficiency 92, 107 | Value at risk 135 |
Variable interest entities 55 | |
HSBC USA Inc. |
HSBC USA Inc. (Registrant) |
/s/ JOHN T. MCGINNIS |
John T. McGinnis |
Senior Executive Vice President and |
Chief Financial Officer |
HSBC USA Inc. |
12 | Computation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends. |
31 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document(1,2) |
101.SCH | XBRL Taxonomy Extension Schema Document(1,2) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document(1,2) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document(1,2) |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document(1,2) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document(1,2) |
1. | Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in HSBC USA Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in eXentsible Business Reporting Language (“XBRL”) interactive data files: (i) the Consolidated Statement of Income for the three months ended March 31, 2013 and 2012, (ii) the Consolidated Statement of Comprehensive Income for the three months ended March 31, 2013 and 2012, (iii) the Consolidated Balance Sheet as of March 31, 2013 and December 31. 2012, (iv) the Consolidated Statement of Changes in Shareholders' Equity for the three months ended March 31, 2013 and 2012, (v) the Consolidated Statement of Cash Flows for the three months ended March 31, 2013 and 2012, and (vi) the Notes to Consolidated Financial Statements. |
2. | As provided in Rule 406T of Regulation S-T, this information shall be not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections. |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
(dollars are in millions) | |||||||
Ratios excluding interest on deposits: | |||||||
Income from continuing operations | $ | 183 | $ | 80 | |||
Income tax expense | 104 | 18 | |||||
Less: Undistributed equity earnings | — | — | |||||
Fixed charges: | |||||||
Interest on: | |||||||
Borrowed funds | 9 | 9 | |||||
Long-term debt | 167 | 154 | |||||
Others | 16 | 12 | |||||
One third of rents, net of income from subleases | 9 | 8 | |||||
Total fixed charges, excluding interest on deposits | 201 | 183 | |||||
Earnings from continuing operations before taxes and fixed charges, net of undistributed equity earnings | 488 | 281 | |||||
Ratio of earnings to fixed charges | 2.43 | 1.54 | |||||
Total preferred stock dividend factor(1) | $ | 25 | $ | 25 | |||
Fixed charges, including the preferred stock dividend factor | $ | 226 | $ | 208 | |||
Ratio of earnings from continuing operations to combined fixed charges and preferred stock dividends | 2.16 | 1.35 | |||||
Ratios including interest on deposits: | |||||||
Total fixed charges, excluding interest on deposits | $ | 201 | $ | 183 | |||
Add: Interest on deposits | 43 | 76 | |||||
Total fixed charges, including interest on deposits | $ | 244 | $ | 259 | |||
Earnings from continuing operations before taxes and fixed charges, net of undistributed equity earnings | $ | 488 | $ | 281 | |||
Add: Interest on deposits | 43 | 76 | |||||
Total | $ | 531 | $ | 357 | |||
Ratio of earnings to fixed charges | 2.18 | 1.38 | |||||
Fixed charges, including the preferred stock dividend factor | $ | 226 | $ | 208 | |||
Add: Interest on deposits | 43 | 76 | |||||
Fixed charges, including the preferred stock dividend factor and interest on deposits | $ | 269 | $ | 284 | |||
Ratio of earnings from continuing operations to combined fixed charges and preferred stock dividends | 1.97 | 1.26 |
(1) | Preferred stock dividends grossed up to their pretax equivalents. |
/s/ IRENE M. DORNER |
Irene M. Dorner |
President, Chief Executive |
Officer and Chairman of the Board |
/s/ JOHN T. MCGINNIS |
John T. McGinnis |
Senior Executive Vice President and |
Chief Financial Officer |
/s/ IRENE M. DORNER |
Irene M. Dorner |
President, Chief Executive |
Officer and Chairman of the Board |
/s/ JOHN T. MCGINNIS |
John T. McGinnis |
Senior Executive Vice President and |
Chief Financial Officer |
Intangible Assets (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
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Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | Intangible assets consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Residential MSRs | Fair value of residential MSRs is calculated using the following critical assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential MSRs Activity | Residential MSRs activity is summarized in the following table:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential Mortgage Loans Serviced for Others | Information regarding residential mortgage loans serviced for others, which are not included in the consolidated balance sheet, is summarized in the following table:
|
Fair Value Measurements - Quantitative Information about Recurring Fair Value Measurement of Assets and Liabilities Classified as Level 3 (Detail) (USD $)
|
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|||||||
Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Equity / Equity Index volatility | |||||||
Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Equity / Equity and Equity / Index correlation | |||||||
Minimum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 0.00% | 0.00% | ||||||
Minimum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Constant default rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 4.00% | 4.00% | ||||||
Minimum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Loss Severity Rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 50.00% | 50.00% | ||||||
Minimum [Member] | Corporate and other domestic [Member] | Discounted cash flows [Member] | Spread volatility on collateral assets [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 1.10% | 1.50% | ||||||
Minimum [Member] | Foreign debt securities [Member] | Discounted cash flows [Member] | Correlations of default among a portfolio of credit names of embedded credit derivatives [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 34.30% | 28.56% | ||||||
Minimum [Member] | Equity securities [Member] | Net asset value of hedge funds [Member] | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 30.00% | 30.00% | ||||||
Minimum [Member] | Interest rate contracts [Member] | Market Comparable Adjusted For Probability To Fund [Member] | Probability to fund for rate lock commitments [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 8.00% | 8.00% | ||||||
Minimum [Member] | Foreign exchange contracts [Member] | Option pricing model [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 1.60% | 1.60% | ||||||
Minimum [Member] | Equity contracts [Member] | Option pricing model [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 5.00% | 6.00% | ||||||
Minimum [Member] | Equity contracts [Member] | Option pricing model [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 52.00% | 56.00% | ||||||
Minimum [Member] | Credit Derivative Contracts [Member] | Option pricing model [Member] | Correlation of defaults of a portfolio of reference credit names [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 36.30% | 32.04% | ||||||
Minimum [Member] | Credit Derivative Contracts [Member] | Option pricing model [Member] | Industry by industry correlation of defaults [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 48.00% | 44.00% | ||||||
Minimum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Constant prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 7.30% | 8.50% | ||||||
Minimum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Option adjusted spread [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 8.07% | 8.07% | ||||||
Minimum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Estimated annualized costs to service [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of inputs per account | 91 | 98 | ||||||
Minimum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 5.00% | 6.00% | ||||||
Minimum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 52.00% | 56.00% | ||||||
Minimum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 1.60% | 1.60% | ||||||
Minimum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 5.00% | 6.00% | ||||||
Minimum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 52.00% | 56.00% | ||||||
Minimum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 1.60% | 1.60% | ||||||
Maximum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 6.00% | 6.00% | ||||||
Maximum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Constant default rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 11.00% | 14.00% | ||||||
Maximum [Member] | Collateralized debt obligations [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member] | Loss Severity Rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 95.00% | 100.00% | ||||||
Maximum [Member] | Corporate and other domestic [Member] | Discounted cash flows [Member] | Spread volatility on collateral assets [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 4.00% | 4.00% | ||||||
Maximum [Member] | Foreign debt securities [Member] | Discounted cash flows [Member] | Correlations of default among a portfolio of credit names of embedded credit derivatives [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 34.40% | 28.57% | ||||||
Maximum [Member] | Equity securities [Member] | Net asset value of hedge funds [Member] | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 100.00% | 100.00% | ||||||
Maximum [Member] | Interest rate contracts [Member] | Market Comparable Adjusted For Probability To Fund [Member] | Probability to fund for rate lock commitments [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 100.00% | 100.00% | ||||||
Maximum [Member] | Foreign exchange contracts [Member] | Option pricing model [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 20.90% | 20.90% | ||||||
Maximum [Member] | Equity contracts [Member] | Option pricing model [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 120.00% | 104.00% | ||||||
Maximum [Member] | Equity contracts [Member] | Option pricing model [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 61.00% | 64.00% | ||||||
Maximum [Member] | Credit Derivative Contracts [Member] | Option pricing model [Member] | Correlation of defaults of a portfolio of reference credit names [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 45.80% | 45.31% | ||||||
Maximum [Member] | Credit Derivative Contracts [Member] | Option pricing model [Member] | Industry by industry correlation of defaults [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 75.00% | 67.00% | ||||||
Maximum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Constant prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 33.10% | 44.80% | ||||||
Maximum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Option adjusted spread [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 19.07% | 19.07% | ||||||
Maximum [Member] | Mortgage servicing rights [Member] | Option adjusted discounted cash flows [Member] | Estimated annualized costs to service [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of inputs per account | 256 | 263 | ||||||
Maximum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 120.00% | 104.00% | ||||||
Maximum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 61.00% | 64.00% | ||||||
Maximum [Member] | Deposits In Domestic Offices [Member] | Option adjusted discounted cash flows [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 20.90% | 20.90% | ||||||
Maximum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 120.00% | 104.00% | ||||||
Maximum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 61.00% | 64.00% | ||||||
Maximum [Member] | Long-term Debt [Member] | Option adjusted discounted cash flows [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 20.90% | 20.90% | ||||||
Weighted Average [Member] | Corporate and other domestic [Member] | Discounted cash flows [Member] | Correlation between insurance claim shortfall and collateral value [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Range of Inputs | 80.00% | 80.00% | ||||||
Recurring [Member] | Level 3 [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Equity / Equity Index volatility | [1],[2] | ||||||
Recurring [Member] | Level 3 [Member] | Prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Prepayment rates | |||||||
Recurring [Member] | Level 3 [Member] | Constant default rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Conditional default rates | |||||||
Recurring [Member] | Level 3 [Member] | Loss Severity Rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Loss severity rates | |||||||
Recurring [Member] | Level 3 [Member] | Spread volatility on collateral assets [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Spread volatility on collateral assets | |||||||
Recurring [Member] | Level 3 [Member] | Correlation between insurance claim shortfall and collateral value [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Correlation between insurance claim shortfall and collateral value | |||||||
Recurring [Member] | Level 3 [Member] | Correlations of default among a portfolio of credit names of embedded credit derivatives [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Correlations of default among a portfolio of credit names of embedded credit derivatives | |||||||
Recurring [Member] | Level 3 [Member] | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Range of fair value adjustments to reflect restrictions on timing and amount of redemption and realization risks | |||||||
Recurring [Member] | Level 3 [Member] | Probability to fund for rate lock commitments [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Probability to fund for rate lock commitments | |||||||
Recurring [Member] | Level 3 [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Implied volatility of currency pairs | [2] | ||||||
Recurring [Member] | Level 3 [Member] | Equity / Equity Index volatility [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Equity / Equity Index volatility | [1],[2] | ||||||
Recurring [Member] | Level 3 [Member] | Equity / Equity and Equity / Index correlation
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Equity / Equity and Equity / Index correlation | [1],[2] | ||||||
Recurring [Member] | Level 3 [Member] | Correlation of defaults of a portfolio of reference credit names [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Correlation of defaults of a portfolio of reference credit names | |||||||
Recurring [Member] | Level 3 [Member] | Industry by industry correlation of defaults [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Industry by industry correlation of defaults | |||||||
Recurring [Member] | Level 3 [Member] | Constant prepayment rates [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Constant prepayment rates | |||||||
Recurring [Member] | Level 3 [Member] | Option adjusted spread [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Option adjusted spread | |||||||
Recurring [Member] | Level 3 [Member] | Estimated annualized costs to service [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Estimated annualized costs to service | |||||||
Recurring [Member] | Level 3 [Member] | Implied volatility of currency pairs [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Implied volatility of currency pairs | [1],[2] | ||||||
Recurring [Member] | Level 3 [Member] | Broker quotes or consensus pricing and, where applicable, discounted cash flows [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Broker quotes or consensus pricing and, where applicable, discounted cash flows | |||||||
Recurring [Member] | Level 3 [Member] | Discounted cash flows [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Discounted cash flows | |||||||
Recurring [Member] | Level 3 [Member] | Net asset value of hedge funds [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Net asset value of hedge funds | |||||||
Recurring [Member] | Level 3 [Member] | Market Comparable Adjusted For Probability To Fund [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Market comparable adjusted for probability to fund | |||||||
Recurring [Member] | Level 3 [Member] | Option pricing model [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Option pricing model | [2] | ||||||
Recurring [Member] | Level 3 [Member] | Option adjusted discounted cash flows [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Significant Unobservable Inputs | Option adjusted discounted cash flows | [1],[2] | ||||||
Recurring [Member] | Level 3 [Member] | Collateralized debt obligations [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 481,000,000 | 466,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Corporate and other domestic [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 1,524,000,000 | 1,861,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Foreign debt securities [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 437,000,000 | 610,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Equity securities [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 11,000,000 | 9,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Interest rate contracts [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 6,000,000 | 7,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Foreign exchange contracts [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 134,000,000 | [2] | 5,000,000 | [2] | ||||
Recurring [Member] | Level 3 [Member] | Equity contracts [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 34,000,000 | [2] | (7,000,000) | [2] | ||||
Recurring [Member] | Level 3 [Member] | Credit Derivative Contracts [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 364,000,000 | 571,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Mortgage servicing rights [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | 190,000,000 | 168,000,000 | ||||||
Recurring [Member] | Level 3 [Member] | Deposits In Domestic Offices [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | (2,876,000,000) | (2,636,000,000) | [1],[2] | |||||
Recurring [Member] | Level 3 [Member] | Long-term Debt [Member]
|
||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Fair Value | (618,000,000) | [1],[2] | (429,000,000) | |||||
|
Trading Assets and Liabilities - Trading Assets and Liabilities (Detail) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||
---|---|---|---|---|---|---|---|---|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | $ 34,658,000,000 | $ 35,995,000,000 | ||||||
Trading liabilities | 19,488,000,000 | 19,820,000,000 | ||||||
U.S. Treasury [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 1,234,000,000 | 2,484,000,000 | ||||||
US Government Agencies Debt Securities [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 330,000,000 | 337,000,000 | ||||||
US Government sponsored enterprises [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 87,000,000 | [1] | 32,000,000 | [1] | ||||
Asset backed securities [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 704,000,000 | 687,000,000 | ||||||
Corporate and foreign bonds [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 8,043,000,000 | [2] | 9,583,000,000 | [2] | ||||
Other securities [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 33,000,000 | 36,000,000 | ||||||
Precious metals [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 15,875,000,000 | 12,332,000,000 | ||||||
Trading liabilities | 6,186,000,000 | 5,767,000,000 | ||||||
Derivatives [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | 8,352,000,000 | 10,504,000,000 | ||||||
Trading liabilities | 12,461,000,000 | 13,846,000,000 | ||||||
Securities sold, not yet purchased [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading liabilities | 841,000,000 | 207,000,000 | ||||||
Foreign Bonds, Greece, Italy, Portugal, Spain, Ireland [Member]
|
||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||
Trading assets | $ 0 | $ 0 | ||||||
|
Retained Earnings and Regulatory Capital Requirements (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained Earnings and Regulatory Capital Requirements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Amounts and Ratios in Accordance With Current Banking Regulations | Capital amounts and ratios of HSBC USA Inc. and HSBC Bank USA, calculated in accordance with current banking regulations, are summarized in the following table.
|
Retained Earnings and Regulatory Capital Requirements - Capital Amounts and Ratios in Accordance With Current Banking Regulations (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
HSBC USA Inc [Member]
|
||||||||||
Total capital ratio: | ||||||||||
Capital Amount | $ 20,929 | $ 20,764 | ||||||||
Well-Capitalized Minimum Ratio, Total capital | 10.00% | [1] | 10.00% | [1] | ||||||
Actual Ratio, Total Capital | 18.11% | 19.52% | ||||||||
Tier 1 capital ratio: | ||||||||||
Capital Amount, Tier 1 capital | 14,717 | 14,480 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 capital | 6.00% | [1] | 6.00% | [1] | ||||||
Actual Ratio, Tier 1 Capital | 12.74% | 13.61% | ||||||||
Tier 1 common ratio: | ||||||||||
Capital Amount, Tier 1 common capital | 12,610 | 12,373 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 common capital | 5.00% | [1],[2] | 5.00% | [1],[2] | ||||||
Actual Ratio, Tier 1 common capital | 10.91% | 11.63% | ||||||||
Tier 1 leverage ratio: | ||||||||||
Capital Amount, Tier 1 leverage capital | 14,717 | 14,480 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 leverage capital | 3.00% | [1],[3] | 3.00% | [1],[3] | ||||||
Actual Ratio, Tier 1 leverage capital | 8.00% | 7.70% | ||||||||
Risk weighted assets: | ||||||||||
Risk Weighted Assets | 115,552 | 106,395 | ||||||||
HSBC Bank USA, National Association [Member]
|
||||||||||
Total capital ratio: | ||||||||||
Capital Amount | 21,696 | 21,464 | ||||||||
Well-Capitalized Minimum Ratio, Total capital | 10.00% | [1] | 10.00% | [1] | ||||||
Actual Ratio, Total Capital | 19.54% | 21.07% | ||||||||
Tier 1 capital ratio: | ||||||||||
Capital Amount, Tier 1 capital | 16,326 | 15,482 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 capital | 6.00% | [1] | 6.00% | [1] | ||||||
Actual Ratio, Tier 1 Capital | 14.70% | 15.20% | ||||||||
Tier 1 common ratio: | ||||||||||
Capital Amount, Tier 1 common capital | 16,326 | 15,482 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 common capital | 5.00% | [1] | 5.00% | [1] | ||||||
Actual Ratio, Tier 1 common capital | 14.70% | 15.20% | ||||||||
Tier 1 leverage ratio: | ||||||||||
Capital Amount, Tier 1 leverage capital | 16,326 | 15,482 | ||||||||
Well-Capitalized Minimum Ratio, Tier 1 leverage capital | 5.00% | [1] | 5.00% | [1] | ||||||
Actual Ratio, Tier 1 leverage capital | 9.26% | 8.43% | ||||||||
Risk weighted assets: | ||||||||||
Risk Weighted Assets | $ 111,059 | $ 101,865 | ||||||||
|
Loans - Loans Classified as TDR Loans (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | $ 16 | $ 20 |
Commercial Loan [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 2 | 0 |
Commercial Loan [Member] | Construction and Other Real Estate [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 2 | 0 |
Commercial Loan [Member] | Business Banking and Middle Markets Enterprises [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 0 | 0 |
Commercial Loan [Member] | Other Commercial [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 0 | 0 |
Consumer Loans [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 14 | 20 |
Consumer Loans [Member] | Residential Mortgage [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | 13 | 19 |
Consumer Loans [Member] | Credit Card Receivables [Member]
|
||
Financing Receivable, Modifications [Line Items] | ||
TDR loans during previous months which became contractually delinquent | $ 1 | $ 1 |
Variable Interest Entities - Summary of Assets and Liabilities Related to Consolidated Variable Interest Entities (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Variable Interest Entity [Line Items] | ||
Interest bearing deposits with banks | $ 17,059 | $ 13,279 |
Other assets | 7,277 | 7,069 |
Long-term debt | 22,039 | 21,745 |
Variable interest entities
|
||
Variable Interest Entity [Line Items] | ||
Interest bearing deposits with banks | 210 | 216 |
Other assets | 514 | 533 |
Total | 724 | 749 |
Long-term debt | 92 | 92 |
Other liabilities | 125 | 152 |
Total | $ 217 | $ 244 |
Trading Assets and Liabilities - Trading Assets and Liabilities (Parenthetical) (Detail) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading assets | $ 34,658,000,000 | $ 35,995,000,000 |
Collateralized Mortgage Backed Securities [Member] | Federal National Mortgage Association Certificates and Obligations (FNMA) [Member]
|
||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading assets | 19,000,000 | 16,000,000 |
Collateralized Mortgage Backed Securities [Member] | Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member]
|
||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading assets | $ 69,000,000 | $ 16,000,000 |
Loans - Delinquency Ratio for Consumer Loan (Parenthetical) (Detail) (USD $)
In Billions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Loans Receivable, Net [Abstract] | ||
Residential mortgage loan delinquency carried at lower of amortized cost or fair value less cost to sell | $ 1.1 | $ 1.0 |
Derivative Financial Instruments - Notional Value of Derivative Contracts (Detail) (USD $)
In Billions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Derivative [Line Items] | ||
Interest rate | $ 3,537.7 | $ 3,244.0 |
Foreign Exchange | 1,107.1 | 910.4 |
Commodities, equities and precious metals | 95.3 | 90.5 |
Credit derivatives | 463.5 | 484.9 |
Total | 5,203.6 | 4,729.8 |
Futures and forwards [Member]
|
||
Derivative [Line Items] | ||
Interest rate | 242.7 | 313.9 |
Swaps [Member]
|
||
Derivative [Line Items] | ||
Interest rate | 3,077.2 | 2,842.6 |
Options written [Member]
|
||
Derivative [Line Items] | ||
Interest rate | 110.0 | 43.3 |
Foreign Exchange | 74.6 | 54.9 |
Commodities, equities and precious metals | 22.7 | 21.0 |
Options purchased [Member]
|
||
Derivative [Line Items] | ||
Interest rate | 107.8 | 44.2 |
Foreign Exchange | 0 | 55.5 |
Commodities, equities and precious metals | 23.2 | 21.4 |
Swaps, futures and forwards [Member]
|
||
Derivative [Line Items] | ||
Foreign Exchange | 946.5 | 743.7 |
Commodities, equities and precious metals | 49.4 | 48.1 |
Spot [Member]
|
||
Derivative [Line Items] | ||
Foreign Exchange | $ 86.0 | $ 56.3 |
Related Party Transactions (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Related Party Transactions | The following table presents related party balances and the income and expense generated by related party transactions:
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Information Regarding Loans | As it relates to our discontinued credit card and private label operations, in January 2009, we purchased the GM and UP Portfolios from HSBC Finance, with an outstanding principal balance of $12.4 billion at the time of sale, at a total net premium of $113 million. Additionally, in December 2004, we purchased the private label credit card receivable portfolio as well as private label commercial and closed end loans from HSBC Finance. HSBC Finance retained the customer account relationships for both the GM and UP receivables and the private label credit card receivables and by agreement we purchased on a daily basis substantially all new originations from these account relationships from HSBC Finance. Premiums paid for these receivables are amortized to interest income over the estimated life of the receivables purchased and are included as a component of Income from Discontinued Operations. HSBC Finance serviced these credit card loans for us for a fee through April 30, 2012. Fees paid for servicing these loan portfolios, which are included as a component of Income from discontinued operations, totaled $152 million during the three months ended March 31, 2012. Information regarding these loans is summarized in the table below.
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Discontinued Operations (Tables) (Credit Card Receivable [Member])
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Credit Card Receivable [Member]
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of Discontinued Operations | The following summarizes the results of our discontinued credit card operations for the periods presented:
|
Loans - Status of Consumer Loan Portfolio (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
||||
---|---|---|---|---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | |||||||
Nonaccrual Loans | $ 1,466 | $ 1,629 | |||||
Accruing Loans Contractually Past Due 90 days or More | 40 | 80 | |||||
Total loans | 62,932 | 63,258 | 53,869 | ||||
Consumer Loans [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 18,153 | 17,936 | |||||
Nonaccrual Loans | 1,105 | 1,129 | |||||
Accruing Loans Contractually Past Due 90 days or More | 35 | 43 | |||||
Total loans | 19,293 | 19,108 | |||||
Consumer Loans [Member] | Residential Mortgage [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 14,704 | 14,333 | |||||
Nonaccrual Loans | 1,026 | 1,038 | |||||
Accruing Loans Contractually Past Due 90 days or More | 0 | 0 | |||||
Total loans | 15,730 | 15,371 | 14,344 | ||||
Consumer Loans [Member] | Home Equity Mortgages [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 2,162 | 2,238 | |||||
Nonaccrual Loans | 74 | 86 | |||||
Accruing Loans Contractually Past Due 90 days or More | 0 | 0 | |||||
Total loans | 2,236 | 2,324 | 2,491 | ||||
Consumer Loans [Member] | Total residential mortgages [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 16,866 | 16,571 | |||||
Nonaccrual Loans | 1,100 | [1] | 1,124 | [1] | |||
Accruing Loans Contractually Past Due 90 days or More | 0 | 0 | |||||
Total loans | 17,966 | 17,695 | |||||
Consumer Loans [Member] | Credit Card Receivables [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 736 | 800 | |||||
Nonaccrual Loans | 0 | 0 | |||||
Accruing Loans Contractually Past Due 90 days or More | 13 | 15 | |||||
Total loans | 749 | 815 | 786 | ||||
Consumer Loans [Member] | Other Consumer [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Performing Loans | 551 | 565 | |||||
Nonaccrual Loans | 5 | 5 | |||||
Accruing Loans Contractually Past Due 90 days or More | 22 | 28 | |||||
Total loans | $ 578 | $ 598 | $ 679 | ||||
|
Related Party Transactions - Additional Information (Details) (USD $)
|
1 Months Ended | 3 Months Ended | 24 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Nov. 30, 2012
HSBC Finance [Member]
|
Jan. 31, 2009
HSBC Finance [Member]
|
Mar. 31, 2013
HSBC Finance [Member]
|
Mar. 31, 2012
HSBC Finance [Member]
|
Dec. 31, 2004
HSBC Finance [Member]
|
Mar. 31, 2013
HSBC Finance [Member]
Residential Mortgage [Member]
|
Dec. 31, 2012
HSBC Finance [Member]
Residential Mortgage [Member]
|
Mar. 29, 2012
HSBC Finance [Member]
Credit Card Customer Relationship [Member]
|
Jul. 31, 2004
HSBC Finance [Member]
Credit Card Customer Relationship [Member]
|
Mar. 31, 2012
HSBC Finance [Member]
Credit Card Receivable [Member]
|
Jun. 30, 2012
HSBC Finance [Member]
Extended uncommitted revolving credit facility
|
Dec. 31, 2011
HSBC Finance [Member]
Extended uncommitted revolving credit facility
|
Mar. 31, 2013
HSBC Finance [Member]
Extended uncommitted revolving credit facility
|
Dec. 31, 2012
HSBC Finance [Member]
Extended uncommitted revolving credit facility
|
Mar. 31, 2013
HSBC Finance [Member]
Extended uncommitted revolving credit facility
Maturity Date, September 2017 [Member]
|
Dec. 31, 2012
HSBC Finance [Member]
Extended uncommitted revolving credit facility
Maturity Date, September 2017 [Member]
|
Mar. 31, 2013
HSBC Finance [Member]
Extended uncommitted revolving credit facility
Maturity Date, January 2018 [Member]
|
Dec. 31, 2012
HSBC Finance [Member]
Extended uncommitted revolving credit facility
Maturity Date, January 2018 [Member]
|
Mar. 31, 2013
HSBC Finance [Member]
Extended committed revolving credit facility [Member]
|
Dec. 31, 2012
HSBC Finance [Member]
Extended committed revolving credit facility [Member]
|
May 31, 2012
HSBC Finance [Member]
Extended committed revolving credit facility [Member]
|
Mar. 31, 2013
HMUS [Member]
|
Mar. 31, 2012
HMUS [Member]
|
Dec. 31, 2012
HMUS [Member]
|
Mar. 31, 2013
HNAH [Member]
|
Mar. 31, 2012
HNAH [Member]
|
Apr. 30, 2011
HNAH [Member]
|
Aug. 31, 2009
HNAH [Member]
|
Apr. 30, 2011
HNAH [Member]
Senior Notes [Member]
installment
|
Aug. 31, 2009
HNAH [Member]
Senior Notes [Member]
|
Mar. 31, 2013
Other Affiliates [Member]
|
Dec. 31, 2012
Other Affiliates [Member]
|
Mar. 31, 2013
HSBC Investment [Member]
|
Dec. 31, 2012
HSBC Investment [Member]
|
Mar. 31, 2013
HSBC Holdings Plc [Member]
|
Dec. 31, 2012
HSBC Holdings Plc [Member]
|
Mar. 31, 2013
Hsbc North America [Member]
|
Dec. 31, 2012
Hsbc North America [Member]
|
Mar. 31, 2013
Hsbc Finance And Other Hsbc Affiliates [Member]
|
Dec. 31, 2012
Hsbc Finance And Other Hsbc Affiliates [Member]
|
Mar. 31, 2013
Parent And Other Subsidiaries Of Common Parent [Member]
|
Mar. 31, 2012
Parent And Other Subsidiaries Of Common Parent [Member]
|
Mar. 31, 2013
HSBC Global Resourcing [Member]
|
Mar. 31, 2012
HSBC Global Resourcing [Member]
|
Mar. 31, 2013
Maximum [Member]
HSBC Finance [Member]
|
|
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||
Credit card receivables | $ 108,000,000 | $ 970,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Credit card receivables purchased | 7,400,000,000 | 492,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Fee for servicing credit cards | 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans purchased | 3,700,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans servicing | 1,100,000,000 | 1,200,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans servicing fees | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Services fee paid | 2,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Services fee received | 2,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Service revenue received against employee work for main bank | 16,000,000 | 14,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Extended secured uncommitted credit facility and loans and lines of credit | 1,500,000,000 | 3,800,000,000 | 3,800,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Extended secured uncommitted credit facility to certain subsidiary (In days) | 364 days | 364 days | |||||||||||||||||||||||||||||||||||||||||||||
Extended line of credit | 3,000,000,000 | 2,000,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Extended unsecured uncommitted credit facility to certain subsidiary maturity | 15 years | ||||||||||||||||||||||||||||||||||||||||||||||
Amendment for increase extended unsecured uncommitted credit facility to certain subsidiary | 4,000,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Amount outstanding under the loan agreement | 2,000,000,000 | 2,200,000,000 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Maturing amount of credit agreement | 512,000,000 | 512,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||||||||||||||||||||||||||||||||||||
Purchase of Portfolios with an outstanding principal | 12,400,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Net premium of outstanding principal | 113,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Fees paid for servicing of components of income from discontinued operation | 152,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Loans and lines of credit amount outstanding | 250,000,000 | 310,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Loans and lines of credit interest income | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Senior notes | 3,000,000,000 | 1,000,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Term of floating rate debt | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||
Number of equal installments | 3 | ||||||||||||||||||||||||||||||||||||||||||||||
Notes mature installments period one | 1,000,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Senior note interest rate period | 90 days | ||||||||||||||||||||||||||||||||||||||||||||||
Interest expense on notes | 14,000,000 | 16,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Related Party Marketable Securities | 13,000,000 | 14,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Loan and lease receivable unused line of credit facility | 900,000,000 | 900,000,000 | 500,000,000 | 500,000,000 | 150,000,000 | 150,000,000 | |||||||||||||||||||||||||||||||||||||||||
Extended loans and lines of credit | 460,000,000 | 460,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Line of credit amount outstanding | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Senior Note Floating Rate Period | Notes bear interest at 90 day USD Libor plus a spread | ||||||||||||||||||||||||||||||||||||||||||||||
Notional value of interest rate derivative | 3,537,700,000,000 | 3,244,000,000,000 | 1,213,000,000,000 | 1,066,500,000,000 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of derivative receivables | 673,000,000 | 691,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Expense of stock compensation plans on a pre-tax basis | 9,000,000 | 12,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Support services expense | 23,000,000 | 25,000,000 | |||||||||||||||||||||||||||||||||||||||||||||
Dividends paid | $ 0 | $ 0 |
Guarantee Arrangements and Pledged Assets - Carrying Value and Contractual Amounts of our Sell Protection Credit Derivatives and Major Off-Balance Sheet Guarantee Arrangements (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
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---|---|---|---|---|---|---|---|---|---|---|---|---|
Guarantor Obligations [Line Items] | ||||||||||||
Carrying Value | $ (621) | $ (76) | ||||||||||
Notional/Maximum Exposure to Loss | 239,772 | 248,192 | ||||||||||
Credit derivatives [Member]
|
||||||||||||
Guarantor Obligations [Line Items] | ||||||||||||
Carrying Value | (621) | [1],[2] | (76) | [1],[2] | ||||||||
Notional/Maximum Exposure to Loss | 229,166 | [1],[2] | 237,548 | [1],[2] | ||||||||
Financial standby letters of credit, net of participations [Member]
|
||||||||||||
Guarantor Obligations [Line Items] | ||||||||||||
Carrying Value | 0 | [3],[4] | 0 | [3],[4] | ||||||||
Notional/Maximum Exposure to Loss | 5,405 | [3],[4] | 5,554 | [3],[4] | ||||||||
Performance (non-financial) guarantees [Member]
|
||||||||||||
Guarantor Obligations [Line Items] | ||||||||||||
Carrying Value | 0 | [3] | 0 | [3] | ||||||||
Notional/Maximum Exposure to Loss | 2,747 | [3] | 2,878 | [3] | ||||||||
Liquidity asset purchase agreements [Member]
|
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Guarantor Obligations [Line Items] | ||||||||||||
Carrying Value | 0 | [3] | 0 | [3] | ||||||||
Notional/Maximum Exposure to Loss | $ 2,454 | [3] | $ 2,212 | [3] | ||||||||
|
Guarantee Arrangements and Pledged Assets - Trend in Repurchase Demands Received on Loans Sold to GSEs and Other Third Parties by Loan Origination Vintage (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Commitments and Contingencies Disclosure [Abstract] | ||
Repurchase demands received from our legacy broker channel | $ 77 | $ 84 |
Loans - Average Balance and Interest Income Recognized on Impaired Commercial Loans (Detail) (Commercial Loan [Member], USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Financing Receivable, Impaired [Line Items] | ||
Total average balance of impaired commercial loans | $ 615 | $ 995 |
Total interest income recognized on impaired commercial loans | 1 | 2 |
Construction and Other Real Estate [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
Total average balance of impaired commercial loans | 445 | 694 |
Total interest income recognized on impaired commercial loans | 1 | 1 |
Business Banking and Middle Markets Enterprises [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
Total average balance of impaired commercial loans | 77 | 133 |
Total interest income recognized on impaired commercial loans | 0 | 1 |
Global Banking [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
Total average balance of impaired commercial loans | 18 | 78 |
Total interest income recognized on impaired commercial loans | 0 | 0 |
Other Commercial [Member]
|
||
Financing Receivable, Impaired [Line Items] | ||
Total average balance of impaired commercial loans | 75 | 90 |
Total interest income recognized on impaired commercial loans | $ 0 | $ 0 |
Intangible Assets - Fair Value of Residential MSRs (Detail)
|
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Annualized constant prepayment rate (CPR) | 18.20% | 22.40% |
Constant discount rate | 12.50% | 11.30% |
Weighted average life | 3 years 9 months 18 days | 3 years 4 months 24 days |
Securities Securities - Amortized Cost and Fair Value of Asset Backed Securities (Detail) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
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---|---|---|---|---|---|---|---|---|---|---|---|---|
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | $ 58,040,000,000 | $ 66,041,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 1,572,000,000 | 1,828,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | (154,000,000) | (153,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 59,458,000,000 | 67,716,000,000 | ||||||||||
Amortized Cost, Held-to-Maturity Securities | 1,434,000,000 | 1,620,000,000 | ||||||||||
Unrealized Gains, Held-to-Maturity Securities | 200,000,000 | 211,000,000 | ||||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | 0 | ||||||||||
Fair Value, Held-to-Maturity Securities | 1,634,000,000 | 1,831,000,000 | ||||||||||
Held-to-maturity Securities, Fair Value | 1,600,000,000 | 1,800,000,000 | ||||||||||
U.S. Treasury [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 26,715,000,000 | 34,800,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 475,000,000 | 566,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | (26,000,000) | (24,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 27,164,000,000 | 35,342,000,000 | ||||||||||
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 176,000,000 | [1] | 166,000,000 | [1] | ||||||||
Unrealized Gains, Available-for-sale securities | 1,000,000 | [1] | 1,000,000 | [1] | ||||||||
Unrealized Losses, Available-for-sale securities | (2,000,000) | [1] | (1,000,000) | [1] | ||||||||
Fair Value, Available-for-sale securities | 175,000,000 | [1] | 166,000,000 | [1] | ||||||||
Amortized Cost, Held-to-Maturity Securities | 1,035,000,000 | [2] | 1,121,000,000 | [2] | ||||||||
Unrealized Gains, Held-to-Maturity Securities | 146,000,000 | [2] | 148,000,000 | [2] | ||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | [2] | 0 | [2] | ||||||||
Fair Value, Held-to-Maturity Securities | 1,181,000,000 | [2] | 1,269,000,000 | [2] | ||||||||
Direct Agency Obligations U S Government Sponsored Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 4,029,000,000 | [1] | 4,039,000,000 | [1] | ||||||||
Unrealized Gains, Available-for-sale securities | 374,000,000 | [1] | 364,000,000 | [1] | ||||||||
Unrealized Losses, Available-for-sale securities | (2,000,000) | [1] | (2,000,000) | [1] | ||||||||
Fair Value, Available-for-sale securities | 4,401,000,000 | [1] | 4,401,000,000 | [1] | ||||||||
Mortgage-backed Securities, Issued by Private Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 15,471,000,000 | 15,646,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 536,000,000 | 674,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | (8,000,000) | (6,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 15,999,000,000 | 16,314,000,000 | ||||||||||
Amortized Cost, Held-to-Maturity Securities | 62,000,000 | 66,000,000 | ||||||||||
Unrealized Gains, Held-to-Maturity Securities | 11,000,000 | 12,000,000 | ||||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | 0 | ||||||||||
Fair Value, Held-to-Maturity Securities | 73,000,000 | 78,000,000 | ||||||||||
Collateralized Mortgage Obligations Issued By Private Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 4,865,000,000 | 4,315,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 130,000,000 | 156,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | (19,000,000) | 0 | ||||||||||
Fair Value, Available-for-sale securities | 4,976,000,000 | 4,471,000,000 | ||||||||||
Amortized Cost, Held-to-Maturity Securities | 261,000,000 | 277,000,000 | ||||||||||
Unrealized Gains, Held-to-Maturity Securities | 39,000,000 | 42,000,000 | ||||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | 0 | ||||||||||
Fair Value, Held-to-Maturity Securities | 300,000,000 | 319,000,000 | ||||||||||
Direct Agency Obligations Issued By Private Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 1,000,000 | 1,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 1,000,000 | 1,000,000 | ||||||||||
US States and Political Subdivisions Debt Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 743,000,000 | 877,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 30,000,000 | 37,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | (3,000,000) | (2,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 770,000,000 | 912,000,000 | ||||||||||
Amortized Cost, Held-to-Maturity Securities | 37,000,000 | 38,000,000 | ||||||||||
Unrealized Gains, Held-to-Maturity Securities | 2,000,000 | 3,000,000 | ||||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | 0 | ||||||||||
Fair Value, Held-to-Maturity Securities | 39,000,000 | 41,000,000 | ||||||||||
Residential Mortgage Backed Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 1,000,000 | 1,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 1,000,000 | 1,000,000 | ||||||||||
Amortized Cost, Held-to-Maturity Securities | 39,000,000 | 118,000,000 | ||||||||||
Unrealized Gains, Held-to-Maturity Securities | 2,000,000 | 6,000,000 | ||||||||||
Unrealized Losses, Held-to-Maturity Securities | 0 | 0 | ||||||||||
Fair Value, Held-to-Maturity Securities | 41,000,000 | 124,000,000 | ||||||||||
Commercial Mortgages Backed Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 180,000,000 | 208,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 5,000,000 | 6,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 185,000,000 | 214,000,000 | ||||||||||
Home Equity Backed Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 299,000,000 | 310,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Losses, Available-for-sale securities | (44,000,000) | (52,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 255,000,000 | 258,000,000 | ||||||||||
Student Loans Backed Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Gains, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 0 | 0 | ||||||||||
Other Debt Obligations [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 102,000,000 | 102,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 0 | 0 | ||||||||||
Unrealized Losses, Available-for-sale securities | (17,000,000) | (18,000,000) | ||||||||||
Fair Value, Available-for-sale securities | 85,000,000 | 84,000,000 | ||||||||||
Corporate and other domestic debt securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 24,000,000 | 24,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 2,000,000 | 2,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 26,000,000 | 26,000,000 | ||||||||||
Foreign debt securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 5,267,000,000 | [3],[4] | 5,385,000,000 | [3],[4] | ||||||||
Unrealized Gains, Available-for-sale securities | 14,000,000 | [3],[4] | 16,000,000 | [3],[4] | ||||||||
Unrealized Losses, Available-for-sale securities | (33,000,000) | [3],[4] | (48,000,000) | [3],[4] | ||||||||
Fair Value, Available-for-sale securities | 5,248,000,000 | [3],[4] | 5,353,000,000 | [3],[4] | ||||||||
Equity securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 167,000,000 | 167,000,000 | ||||||||||
Unrealized Gains, Available-for-sale securities | 5,000,000 | 6,000,000 | ||||||||||
Unrealized Losses, Available-for-sale securities | 0 | 0 | ||||||||||
Fair Value, Available-for-sale securities | 172,000,000 | 173,000,000 | ||||||||||
Federal National Mortgage Association Certificates and Obligations (FNMA) [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Held-to-maturity Securities, Fair Value | 477,000,000 | 507,000,000 | ||||||||||
Federal National Mortgage Association Certificates and Obligations (FNMA) [Member] | US Government Agencies Debt Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | 152,000,000 | 153,000,000 | ||||||||||
Foreign Government [Member] | Foreign debt securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Foreign Debt Securities Fully Backed By Foreign Governments | 1,400,000,000 | 1,500,000,000 | ||||||||||
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Held-to-maturity Securities, Fair Value | 558,000,000 | 614,000,000 | ||||||||||
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | US Government Agencies Debt Securities [Member]
|
||||||||||||
Schedule of Available-for-sale Securities and Held-to-Maturity Securities [Line Items] | ||||||||||||
Amortized Cost, Available-for-sale securities | $ 24,000,000 | $ 13,000,000 | ||||||||||
|
Fair Value Option - Components of Gain on Instruments at Fair Value and Related Derivatives (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|||||
Components Of Gain On Instruments At Fair Value And Related Derivatives [Line Items] | ||||||
Interest rate component | $ (253) | [1] | $ (345) | [1] | ||
Credit risk component | 12 | (156) | ||||
Total mark-to-market on financial instruments designated at fair value | (241) | (501) | ||||
Net realized loss on the financial instruments | (8) | (1) | ||||
Mark-to-market on the related derivatives | 206 | 274 | ||||
Net realized gain on the related long-term debt derivatives | 16 | 16 | ||||
Gain (loss) on instruments designated at fair value and related derivatives | (27) | (212) | ||||
Loans [Member]
|
||||||
Components Of Gain On Instruments At Fair Value And Related Derivatives [Line Items] | ||||||
Interest rate component | 0 | [1] | 1 | [1] | ||
Credit risk component | 21 | 32 | ||||
Total mark-to-market on financial instruments designated at fair value | 21 | 33 | ||||
Net realized loss on the financial instruments | (8) | (1) | ||||
Mark-to-market on the related derivatives | 0 | 0 | ||||
Net realized gain on the related long-term debt derivatives | 0 | 0 | ||||
Gain (loss) on instruments designated at fair value and related derivatives | 13 | 32 | ||||
Long-term Debt [Member]
|
||||||
Components Of Gain On Instruments At Fair Value And Related Derivatives [Line Items] | ||||||
Interest rate component | 63 | [1] | 83 | [1] | ||
Credit risk component | (42) | (221) | ||||
Total mark-to-market on financial instruments designated at fair value | 21 | (138) | ||||
Net realized loss on the financial instruments | 0 | 0 | ||||
Mark-to-market on the related derivatives | (62) | (115) | ||||
Net realized gain on the related long-term debt derivatives | 16 | 16 | ||||
Gain (loss) on instruments designated at fair value and related derivatives | (25) | (237) | ||||
Hybrid Instruments [Member]
|
||||||
Components Of Gain On Instruments At Fair Value And Related Derivatives [Line Items] | ||||||
Interest rate component | (316) | [1] | (429) | [1] | ||
Credit risk component | 33 | 33 | ||||
Total mark-to-market on financial instruments designated at fair value | (283) | (396) | ||||
Net realized loss on the financial instruments | 0 | 0 | ||||
Mark-to-market on the related derivatives | 268 | 389 | ||||
Net realized gain on the related long-term debt derivatives | 0 | 0 | ||||
Gain (loss) on instruments designated at fair value and related derivatives | $ (15) | $ (7) | ||||
|
Guarantee Arrangements and Pledged Assets - Outstanding Repurchase Demands Received From GSEs and Other Third Parties (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||
---|---|---|---|---|---|---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||||||||
GSEs | $ 74 | $ 86 | ||||||
Others | 4 | 3 | ||||||
Total | $ 78 | [1] | $ 89 | [2] | ||||
|
Loans - Credit Risk Profile of Commercial Loans (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
||||
---|---|---|---|---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | $ 62,932 | $ 63,258 | $ 53,869 | ||||
Commercial Loan [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 43,639 | 44,150 | |||||
Commercial Loan [Member] | Construction and Other Real Estate [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 8,319 | 8,457 | 7,777 | ||||
Commercial Loan [Member] | Business Banking and Middle Markets Enterprises [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 12,725 | 12,608 | 10,889 | ||||
Commercial Loan [Member] | Global Banking [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 19,718 | 20,009 | 13,852 | ||||
Commercial Loan [Member] | Other Commercial [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 2,877 | 3,076 | 3,051 | ||||
Commercial Loan [Member] | Investment Grade [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 27,204 | [1] | 28,198 | [1] | |||
Commercial Loan [Member] | Investment Grade [Member] | Construction and Other Real Estate [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 3,492 | [1] | 4,727 | [1] | |||
Commercial Loan [Member] | Investment Grade [Member] | Business Banking and Middle Markets Enterprises [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 6,098 | [1] | 6,012 | [1] | |||
Commercial Loan [Member] | Investment Grade [Member] | Global Banking [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 16,472 | [1] | 16,206 | [1] | |||
Commercial Loan [Member] | Investment Grade [Member] | Other Commercial [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 1,142 | [1] | 1,253 | [1] | |||
Commercial Loan [Member] | Non-Investment Grade [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 16,435 | 15,952 | |||||
Commercial Loan [Member] | Non-Investment Grade [Member] | Construction and Other Real Estate [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 4,827 | 3,730 | |||||
Commercial Loan [Member] | Non-Investment Grade [Member] | Business Banking and Middle Markets Enterprises [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 6,627 | 6,596 | |||||
Commercial Loan [Member] | Non-Investment Grade [Member] | Global Banking [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | 3,246 | 3,803 | |||||
Commercial Loan [Member] | Non-Investment Grade [Member] | Other Commercial [Member]
|
|||||||
Financing Receivable, Recorded Investment [Line Items] | |||||||
Total loans | $ 1,735 | $ 1,823 | |||||
|
Loans Held for Sale - Loans Held for Sale (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for sale | $ 399 | $ 1,018 |
Commercial Loan [Member]
|
||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for sale | 58 | 481 |
Consumer Loans [Member]
|
||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for sale | 341 | 537 |
Consumer Loans [Member] | Residential Mortgage [Member]
|
||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for sale | 277 | 472 |
Consumer Loans [Member] | Other Consumer [Member]
|
||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for sale | $ 64 | $ 65 |
Fair Value Measurements - Additional Information Relating To Asset-Backed Securities and Collateralized Debt Obligations (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
|||
---|---|---|---|---|---|
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | $ 526 | $ 557 | |||
Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 159 | ||||
Available-for-sale securities backed by collateral | 526 | [1] | |||
Level 2 [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 64 | ||||
Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 88 | ||||
Available-for-sale securities backed by collateral | 341 | [1] | |||
Level 2 [Member] | Commercial Mortgages [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 185 | [1] | |||
Level 2 [Member] | Residential, Subprime, Financing Receivable [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 71 | ||||
Level 3 [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 481 | ||||
AAA - A Rating [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 296 | [1] | |||
AAA - A Rating [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 156 | ||||
Available-for-sale securities backed by collateral | 185 | [1] | |||
AAA - A Rating [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 111 | [1] | |||
AAA - A Rating [Member] | Level 2 [Member] | Trading asset-backed securities and related collateral [Member] | Student Loans [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 64 | ||||
AAA - A Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 111 | [1] | |||
AAA - A Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 88 | ||||
AAA - A Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 111 | [1] | |||
AAA - A Rating [Member] | Level 2 [Member] | Commercial Mortgages [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 185 | [1] | |||
AAA - A Rating [Member] | Level 2 [Member] | Commercial Mortgages [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 185 | [1] | |||
AAA - A Rating [Member] | Level 2 [Member] | Residential, Subprime, Financing Receivable [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 68 | ||||
AAA - A Rating [Member] | Level 3 [Member] | Trading asset-backed securities and related collateral [Member] | Student Loans [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 0 | ||||
CCC - Unrated [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 66 | [1] | |||
CCC - Unrated [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 3 | ||||
Available-for-sale securities backed by collateral | 1 | [1] | |||
CCC - Unrated [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 65 | [1] | |||
CCC - Unrated [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 66 | [1] | |||
CCC - Unrated [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 1 | [1] | |||
CCC - Unrated [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 65 | [1] | |||
CCC - Unrated [Member] | Level 2 [Member] | Residential, Subprime, Financing Receivable [Member] | Trading asset-backed securities and related collateral [Member] | Residential Mortgage [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading asset-backed securities and related collateral | 3 | ||||
BBB -B Rating [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 164 | [1] | |||
BBB -B Rating [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 79 | [1] | |||
BBB -B Rating [Member] | Trading asset-backed securities and related collateral [Member] | Other Line Of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 85 | [1] | |||
BBB -B Rating [Member] | Level 2 [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 0 | ||||
BBB -B Rating [Member] | Level 2 [Member] | Trading asset-backed securities and related collateral [Member] | Corporate Loans [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 0 | ||||
BBB -B Rating [Member] | Level 2 [Member] | Trading asset-backed securities and related collateral [Member] | Other Debt Obligations [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 0 | ||||
BBB -B Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 164 | [1] | |||
BBB -B Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Home Equity Line of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 79 | [1] | |||
BBB -B Rating [Member] | Level 2 [Member] | Alt [Member] | Trading asset-backed securities and related collateral [Member] | Other Line Of Credit [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Available-for-sale securities backed by collateral | 85 | [1] | |||
BBB -B Rating [Member] | Level 3 [Member] | Trading asset-backed securities and related collateral [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 481 | ||||
BBB -B Rating [Member] | Level 3 [Member] | Trading asset-backed securities and related collateral [Member] | Corporate Loans [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | 303 | ||||
BBB -B Rating [Member] | Level 3 [Member] | Trading asset-backed securities and related collateral [Member] | Other Debt Obligations [Member]
|
|||||
Fair Value Of Other Financial Instrument [Line Items] | |||||
Trading collateralized debt obligations and related collateral | $ 178 | ||||
|
Loans - High LTV Interest-only and Arm Loans (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|||||
Loans [Line Items] | ||||||
Residential mortgage loans with high LTV and no mortgage insurance | $ 900 | [1] | $ 900 | [1] | ||
Sub-prime residential mortgage [Member]
|
||||||
Loans [Line Items] | ||||||
Residential mortgage loans with high LTV and no mortgage insurance | 19 | 20 | ||||
Sub-prime residential mortgage loans held for sale excluded from Arm Loan | 18 | 19 | ||||
Amount of ARM loans to experience first interest rate reset in 2013 | 232 | |||||
Amount of ARM loans to experience first interest rate reset in 2014 | $ 327 | |||||
|
Loans Held for Sale - Additional Information (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 3 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 31, 2012
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Mar. 31, 2013
Consumer Loans [Member]
|
Dec. 31, 2012
Consumer Loans [Member]
|
Mar. 31, 2013
Maximum [Member]
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Fair Value Of Leverage Acquisition Financing Loans Held For Sale | $ 3 | $ 465 | |||||
Fair value of commercial real estate loans held for sale | 55 | 16 | |||||
Residential mortgage loans held for sale include subprime residential mortgage loans at fair value | 51 | 52 | |||||
Valuation allowance on loans helf for sale | 603 | 568 | 647 | 743 | 106 | 114 | |
Loss On Trading Related Revenue Associated With This Economic Hedging Program | 1 | ||||||
Gain on trading related revenue associated with this economic hedging program | $ 7 |
Loans - Delinquency Ratio for Consumer Loan (Detail) (Consumer Loans [Member], USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||
---|---|---|---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | $ 1,285 | $ 1,359 | ||||
Delinquency Ratio | 6.54% | 6.92% | ||||
Residential Mortgage [Member]
|
||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | 1,158 | [1] | 1,233 | [1] | ||
Delinquency Ratio | 7.23% | [1] | 7.78% | [1] | ||
Home Equity Mortgages [Member]
|
||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | 85 | 75 | ||||
Delinquency Ratio | 3.80% | 3.23% | ||||
Total residential mortgages [Member]
|
||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | 1,243 | 1,308 | ||||
Delinquency Ratio | 6.81% | 7.20% | ||||
Credit Card Receivables [Member]
|
||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | 18 | 21 | ||||
Delinquency Ratio | 2.40% | 2.58% | ||||
Other Consumer [Member]
|
||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Dollars of Delinquency | $ 24 | $ 30 | ||||
Delinquency Ratio | 3.74% | 4.52% | ||||
|
Loans - Impaired Commercial Loans Considered as TDR Loans (Detail) (Commercial Loan [Member], USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Financing Receivable, Impaired [Line Items] | ||||||||||
Amount with Impairment Reserves | $ 131 | $ 250 | ||||||||
Amount without Impairment Reserves | 401 | 447 | ||||||||
Total Impaired Commercial Loans | 532 | [1],[2],[3] | 697 | [1],[2],[3] | ||||||
Impairment Reserve | 35 | 96 | ||||||||
Construction and Other Real Estate [Member]
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Amount with Impairment Reserves | 101 | 192 | ||||||||
Amount without Impairment Reserves | 292 | 305 | ||||||||
Total Impaired Commercial Loans | 393 | [1],[2],[3] | 497 | [1],[2],[3] | ||||||
Impairment Reserve | 27 | 86 | ||||||||
Business Banking and Middle Markets Enterprises [Member]
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Amount with Impairment Reserves | 20 | 57 | ||||||||
Amount without Impairment Reserves | 27 | 49 | ||||||||
Total Impaired Commercial Loans | 47 | [1],[2],[3] | 106 | [1],[2],[3] | ||||||
Impairment Reserve | 8 | 10 | ||||||||
Global Banking [Member]
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Amount with Impairment Reserves | 0 | 0 | ||||||||
Amount without Impairment Reserves | 18 | 18 | ||||||||
Total Impaired Commercial Loans | 18 | [1],[2],[3] | 18 | [1],[2],[3] | ||||||
Impairment Reserve | 0 | 0 | ||||||||
Other Commercial [Member]
|
||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||
Amount with Impairment Reserves | 10 | 1 | ||||||||
Amount without Impairment Reserves | 64 | 75 | ||||||||
Total Impaired Commercial Loans | 74 | [1],[2],[3] | 76 | [1],[2],[3] | ||||||
Impairment Reserve | $ 0 | $ 0 | ||||||||
|
Business Segments
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments We have four distinct business segments that we utilize for management reporting and analysis purposes, which are generally based upon global business. Our segment results are reported on a continuing operations basis. There have been no changes in the basis of our segmentation or measurement of segment profit as compared with the presentation in our 2012 Form 10-K accept as noted below. Commercial Banking ("CMB") has historically held investments in low income housing tax credits. The financial benefit from these investments is obtained through lower taxes. Since business segment returns are measured on a pre-tax basis, a revenue share has historically been in place in the form of a funding credit to provide CMB with an exact and equal offset booked to the Other segment. Beginning in 2013, this practice has been eliminated and the low income housing tax credit investments and related financial impact are being recorded entirely in the Other segment. We have reclassified prior period results in both the CMB and Other segments to conform to the revised current year presentation. Net interest income of each segment represents the difference between actual interest earned on assets and interest incurred on liabilities of the segment, adjusted for a funding charge or credit. Segments are charged a cost to fund assets (e.g. customer loans) and receive a funding credit for funds provided (e.g. customer deposits) based on equivalent market rates. The objective of these charges/credits is to transfer interest rate risk from the segments to one centralized unit in Global Banking and Markets and more appropriately reflect the profitability of segments. Certain other revenue and operating expense amounts are also apportioned among the business segments based upon the benefits derived from this activity or the relationship of this activity to other segment activity. These inter-segment transactions are accounted for as if they were with third parties. Our segment results are presented in accordance with IFRSs (a non-U.S. GAAP financial measure) on a legal entity basis (“IFRSs Basis”) as operating results are monitored and reviewed, trends are evaluated and decisions about allocating resources, such as employees are made almost exclusively on an IFRSs basis since we report financial information to our parent, HSBC in accordance with IFRSs. We continue to monitor capital adequacy, establish dividend policy and report to regulatory agencies on a U.S. GAAP legal entity basis. Net Interest Income Effective interest rate - The calculation of effective interest rates under IAS 39, “Financial Instruments: Recognition and Measurement” (“IAS 39”), requires an estimate of changes in estimated contractual cash flows, including fees and points paid or received between parties to the contract that are an integral part of the effective interest rate to be included. U.S. GAAP generally prohibits recognition of interest income to the extent the net interest in the loan would increase to an amount greater than the amount at which the borrower could settle the obligation. Under U.S. GAAP, prepayment penalties are generally recognized as received. U.S. GAAP also includes interest income on loans originated as held for sale which is included in other operating income for IFRSs. Deferred loan origination costs and fees - Certain loan fees and incremental direct loan costs, which would not have been incurred but for the origination of loans, are deferred and amortized to earnings over the life of the loan under IFRSs. Certain loan fees and direct incremental loan origination costs, including certain internal costs directly attributable to the origination of loans in addition to direct salaries, are deferred and amortized to earnings under U.S. GAAP. Loan origination deferrals under IFRSs are more stringent and generally result in lower costs being deferred than permitted under U.S. GAAP. In addition, all deferred loan origination fees, costs and loan premiums must be recognized based on the expected life of the loan under IFRSs as part of the effective interest calculation while under U.S. GAAP they may be recognized on either a contractual or expected life basis. Derivative interest expense - Under IFRSs, net interest income includes the interest element for derivatives which corresponds to debt designated at fair value. For U.S. GAAP, this is included in gain (loss) on instruments designated at fair value and related derivatives which is a component of other revenues. Other Operating Income (Total Other Revenues) Derivatives - Effective January 1, 2008, U.S. GAAP removed the observability requirement of valuation inputs to allow up-front recognition of the difference between transaction price and fair value in the consolidated statement of income (loss). Under IFRSs, recognition is permissible only if the inputs used in calculating fair value are based on observable inputs. If the inputs are not observable, profit and loss is deferred and is recognized (1) over the period of contract, (2) when the data becomes observable, or (3) when the contract is settled. Unquoted equity securities – Under IFRSs, equity securities which are not quoted on a recognized exchange, but for which fair value can be reliably measured, are required to be measured at fair value. Securities measured at fair value under IFRSs are classified as either available-for-sale securities, with changes in fair value recognized in shareholders’ equity, or as trading securities, with changes in fair value recognized in income. Under U.S. GAAP, equity securities that are not quoted on a recognized exchange are not considered to have a readily determinable fair value and are required to be measured at cost, less any provisions for known impairment, and classified in other assets. Loans held for sale - IFRSs requires loans originated with the intent to sell to be classified as trading assets and recorded at their fair value. Under U.S. GAAP, loans designated as held for sale are reflected as loans and recorded at the lower of amortized cost or fair value. Under IFRSs, the income related to loans held for sale is reported in trading revenue. Under U.S. GAAP, the income related to loans held for sale is reported similarly to loans held for investment. For loans transferred to held for sale subsequent to origination, IFRSs requires these receivables to be reported separately on the balance sheet when certain criteria are met which are generally more stringent than those under U.S. GAAP, but does not change the recognition and measurement criteria. Accordingly, for IFRSs purposes such loans continue to be accounted for and impairment continues to be measured in accordance with IAS 39 with any gain or loss recorded at the time of sale. U.S. GAAP requires loans that meet the held for sale classification requirements be transferred to a held for sale category at the lower of amortized cost or fair value. Under U.S. GAAP, the component of the lower of amortized cost or fair value adjustment related to credit risk is recorded in the statement of income (loss) as provision for credit losses while the component related to interest rates and liquidity factors is reported in the statement of income (loss) in other revenues. IFRS reclassification of fair value measured financial assets during 2008 - Certain securities were reclassified from “trading assets” to “loans and receivables” under IFRSs as of July 1, 2008 pursuant to an amendment to IAS 39 and are no longer marked to market. In November 2008, additional securities were similarly transferred to loans and receivables. These securities continue to be classified as “trading assets” under U.S. GAAP. Additionally, certain Leverage Acquisition Finance (“LAF”) loans had been classified as trading assets for IFRSs and to be consistent, an irrevocable fair value option was elected on these loans under U.S. GAAP on January 1, 2008. These loans were reclassified to “loans and advances” as of July 1, 2008 pursuant to the IAS 39 amendment discussed above. Under U.S. GAAP, these loans are classified as “held for sale” and carried at fair value due to the irrevocable nature of the fair value option. Substantially all of the remaining balance of these loans were sold in the first quarter of 2013. Servicing assets – Under IFRSs, servicing assets are initially recorded on the balance sheet at cost and amortized over the projected life of the assets. Servicing assets are periodically tested for impairment with impairment adjustments charged against current earnings. Under U.S. GAAP, servicing assets are initially recorded on the balance sheet at fair value. All subsequent adjustments to fair value are reflected in current period earnings. Other-than-temporary impairments - Under U.S. GAAP, a decline in fair value of an available-for-sale debt security below its amortized cost may indicate that the security is other-than-temporarily impaired under certain conditions. IFRSs do not have an “other than temporary” impairment concept. Under IFRSs, a decline in fair value of an available-for-sale debt security below its amortized cost is considered evidence of impairment if the decline can, at least partially, be attributed to an incurred loss event that impacts the estimated future cash flows of the security (i.e., a credit loss event). Thus a security may not be considered impaired if the decline in value is the result of events that do not negatively impact the estimated future cash flows of the security (e.g., an increase in the risk-free interest rate). However, until the entity sells the security, it will have to assess the security for credit losses at each reporting date. Another difference between U.S. GAAP and IFRSs is the amount of the loss that an entity recognizes in earnings on an impaired (other-than-temporarily impaired for U.S. GAAP) available-for-sale debt security. Under U.S. GAAP, if an entity has decided to sell a debt security whose fair value has declined below its amortized cost, or will be more likely than not required to sell the debt security before it recovers its amortized cost basis, it will recognize an impairment loss in earnings equal to the difference between the debt security's carrying amount and its fair value. If the entity has not decided to sell the debt security and will not be more likely than not required to sell the debt security before it recovers its amortized cost basis, but nonetheless expects that it will not recover the security's amortized cost basis, it will bifurcate the impairment loss into a credit loss component and a non-credit loss component, and recognize the credit loss component in earnings and the non-credit loss component in other comprehensive income. Under IFRSs, the entity recognizes the entire decline in fair value below amortized cost in earnings. REO expense - Other revenues under IFRSs include losses on sale and the lower of amortized cost or fair value of the collateral less cost to sell adjustments on REO properties which are classified as other expense under U.S. GAAP. Securities -Under IFRSs, securities include HSBC shares held for stock plans at fair value. These shares held for stock plans are measured at fair value through other comprehensive income. If it is determined that these shares have become impaired, the unrealized loss in accumulated other comprehensive income is reclassified to profit or loss. There is no similar requirement under U.S. GAAP. Loan Impairment Charges (Provision for Credit Losses) IFRSs requires a discounted cash flow methodology for estimating impairment on pools of homogeneous customer loans which requires the discounting of cash flows including recovery estimates at the original effective interest rate of the pool of customer loans. The amount of impairment relating to the discounting of future cash flows unwinds with the passage of time, and is recognized in interest income. Also under IFRSs, if the recognition of a write-down to fair value on secured loans decreases because collateral values have improved and the improvement can be related objectively to an event occurring after recognition of the write-down, such write-down is reversed, which is not permitted under U.S. GAAP. Additionally under IFRSs, future recoveries on charged-off loans or loans written down to fair value less cost to obtain title and sell are accrued for on a discounted basis and a recovery asset is recorded. Subsequent recoveries are recorded to earnings under U.S. GAAP, but are adjusted against the recovery asset under IFRSs. Under IFRSs, interest on impaired loans is recorded at the effective interest rate on the customer loan balance net of impairment allowances, and therefore reflects the collectibility of the loans. As discussed above, under U.S. GAAP, the credit risk component of the lower of amortized cost or fair value adjustment related to the transfer of receivables to held for sale is recorded in the consolidated statement of income as provision for credit losses. There is no similar requirement under IFRSs. Credit loss reserves on TDR Loans under U.S. GAAP are established based on the present value of expected future cash flows discounted at the loans' original effective interest rate. For loans collectively evaluated for impairment under US GAAP, bank industry practice adopted in the fourth quarter of 2012 generally results in a loss emergence period for these loans using a roll rate migration analysis which results in 12 months of losses in our allowance for credit losses. Under IFRSs, we completed a review in the fourth quarter of 2012 which concluded that the estimated average period of time from current status to write-off for loans collectively evaluated for impairment using a roll rate migration analysis was 10 months (previously a period of 7 months was used) which was also adopted in the fourth quarter of 2012. Operating Expenses Pension and other postretirement benefit costs - Pension expense under U.S. GAAP is generally higher than under IFRSs as a result of the amortization of the amount by which actuarial losses exceeds the higher of 10 percent of the projected benefit obligation or fair value of plan assets (the “corridor”). As a result of amendments to the applicable IFRSs effective January 1, 2013, interest cost and expected return on plan assets is replaced by a finance cost component comprising the net interest on the net defined benefit liability. This has resulted in an increase in pension expense as the net interest does not reflect the benefit from the expectation of higher returns on the riskier plan assets. In 2010, changes to future accruals for legacy participants under the HSBC North America Pension Plan were accounted for as a plan curtailment under IFRSs, which resulted in immediate income recognition. Under U.S. GAAP, these changes were considered to be a negative plan amendment which resulted in no immediate income recognition. Share-based bonus arrangements - Under IFRSs, the recognition of compensation expense related to share-based bonuses begins on January 1 of the current year for awards expected to be granted in the first quarter of the following year. Under U.S. GAAP, the recognition of compensation expense related to share-based bonuses does not begin until the date the awards are granted. Property - Under IFRSs, the carrying amount of property held for own use reflects revaluation surpluses recorded prior to January 1, 2004. Consequently, the carrying amounts of tangible fixed assets and shareholders' equity are lower under U.S. GAAP than under IFRSs. There is a correspondingly lower depreciation charge and higher net income as well as higher gains (or smaller losses) on the disposal of fixed assets under U.S. GAAP. For investment properties, net income under U.S. GAAP does not reflect the unrealized gain or loss recorded under IFRSs for the period. In addition, the sale of our 452 Fifth Avenue property, including the 1 W. 39th Street building in April 2010, resulted in the recognition of a gain under IFRSs while under U.S. GAAP, such gain is deferred and recognized over the lease term due to our continuing involvement. Litigation accrual - Under U.S. GAAP, litigation accruals are recorded when it is probable a liability has been incurred and the amount is reasonably estimable. Under IFRSs, a present obligation must exist for an accrual to be recorded. In certain cases, this creates differences in the timing of accrual recognition between IFRSs and U.S. GAAP. Assets Customer loans (Loans) - As discussed more fully above under "Other Operating Income (Total Other Revenues) - Loans held for sale," on an IFRSs basis loans designated as held for sale at the time of origination and accrued interest are classified as trading assets. However, the accounting requirements governing when receivables previously held for investment are transferred to a held for sale category are more stringent under IFRSs than under U.S. GAAP which results in loans generally being reported as held for sale later than under U.S. GAAP. Precious metals - Precious metals leased or loaned to customers are reclassified from trading precious metals into loans. Precious metal leases or loans are stated at spot price of the underlying precious metals with changes in value arising from changes in spot price recorded in other income. Interest is recorded as interest income in the consolidated statement of income. Under IFRSs, precious metals leased or loaned to customers continue to be part of the precious metal inventory which is stated at fair value. We take into consideration any financing and leasing arrangement in determining the fair value of precious metals. Derivatives - Under U.S. GAAP, derivative receivables and payables with the same counterparty may be reported on a net basis in the balance sheet when there is an executed International Swaps and Derivatives Association, Inc. (“ISDA”) Master Netting Arrangement. In addition, under U.S. GAAP, fair value amounts recognized for the obligation to return cash collateral received or the right to reclaim cash collateral paid are offset against the fair value of derivative instruments. Under IFRSs, these agreements do not necessarily meet the requirements for offset, and therefore such derivative receivables and payables are presented gross on the balance sheet. Goodwill - IFRSs and U.S. GAAP require goodwill to be tested for impairment at least annually, or more frequently if circumstances indicate that goodwill may be impaired. There are also differences between IFRSs and U.S. GAAP in how impairment is measured as U.S GAAP requires a two-step impairment test which requires the fair value of goodwill to be determined in the same manner as the amount of goodwill recognized in a business combination. For IFRSs, goodwill was amortized until 2005, however goodwill was amortized under U.S. GAAP until 2002, which resulted in a lower carrying amount of goodwill under IFRSs. VIEs - The requirements for consolidation of variable interest entities (“VIEs”) under U.S. GAAP are based on both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE. As a result, under U.S. GAAP we were determined to be the primary beneficiary of and consolidated a commercial paper conduit effective January 1, 2010. However in the first quarter of 2011, changes involving liquidity asset purchase agreements were made that caused us to no longer be considered the primary beneficiary and this commercial paper conduit was deconsolidated at March 31, 2011. Under IFRSs this conduit was not consolidated. Results for each segment on an IFRSs basis, as well as a reconciliation of total results under IFRSs to U.S. GAAP consolidated totals, are provided in the following tables.
|
Fair Value Measurements - Changes in Fair Value of Level 3 Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | $ 3,690 | $ 4,157 | ||||||||||
Fair Value Assets, Trading Revenue (Loss) | (88) | [1] | 226 | [1] | ||||||||
Fair Value Assets, Other Revenue | (15) | [1] | 0 | [1] | ||||||||
Purchases | 36 | 83 | ||||||||||
Fair Value Assets, Issuances | 6 | 8 | ||||||||||
Fair Value Assets, Settlements | (600) | (123) | ||||||||||
Transfers Into Level 3 | (47) | (3) | ||||||||||
Fair Value Assets, Transfers Out of Level 3 | (7) | (12) | ||||||||||
Fair Value Assets, Ending Balance | 3,181 | 3,884 | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 51 | (235) | ||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Liability, Beginning Balance | (3,065) | (2,953) | ||||||||||
Fair Value Liability, Trading Revenue (Loss) | (71) | [1] | 57 | [1] | ||||||||
Fair Value Liability, Purchases | 0 | 0 | ||||||||||
Fair Value Liability, Issuances | (614) | (376) | ||||||||||
Fair Value Liability, Settlements | 159 | 85 | ||||||||||
Fair Value Liability, Transfers Into Level 3 | 11 | 3 | ||||||||||
Fair Value Liability, Transfers Out of Level 3 | 86 | 174 | ||||||||||
Fair Value Liability, Ending Balance | (3,494) | (3,124) | ||||||||||
Fair Value Liability, Current Period Unrealized Gains (Losses) | (57) | (41) | ||||||||||
Interest rate contracts [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 7 | [2] | 9 | [2] | ||||||||
Fair Value Assets, Other Revenue | 1 | [1],[2] | 0 | [1],[2] | ||||||||
Fair Value Assets, Settlements | 0 | [2] | ||||||||||
Fair Value Assets, Ending Balance | 6 | [3] | 9 | [2] | ||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | (1) | [2] | 0 | [2] | ||||||||
Foreign exchange contracts [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 5 | [2] | (1) | [2] | ||||||||
Fair Value Assets, Trading Revenue (Loss) | (15) | [1],[2] | 1 | [1],[2] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1],[2] | ||||||||||
Fair Value Assets, Issuances | 0 | [2] | ||||||||||
Fair Value Assets, Settlements | 122 | [2] | ||||||||||
Transfers Into Level 3 | (8) | (3) | [2] | |||||||||
Fair Value Assets, Transfers Out of Level 3 | 0 | [2] | ||||||||||
Fair Value Assets, Ending Balance | 134 | [3] | (5) | [2] | ||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 137 | [2] | (1) | [2] | ||||||||
Equity contracts [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | (7) | [2] | (83) | [2] | ||||||||
Fair Value Assets, Trading Revenue (Loss) | (61) | [1],[2] | (50) | [1],[2] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1],[2] | ||||||||||
Fair Value Assets, Settlements | (20) | [2] | (19) | [2] | ||||||||
Transfers Into Level 3 | 7 | [2] | 0 | [2] | ||||||||
Fair Value Assets, Transfers Out of Level 3 | (7) | [2] | (1) | [2] | ||||||||
Fair Value Assets, Ending Balance | 34 | [3] | (53) | [2] | ||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 41 | [2] | 27 | [2] | ||||||||
Credit contracts [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 571 | [2] | 1,353 | [2] | ||||||||
Fair Value Assets, Trading Revenue (Loss) | 49 | [1],[2] | 375 | [1],[2] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1],[2] | ||||||||||
Fair Value Assets, Settlements | (112) | [2] | 6 | [2] | ||||||||
Transfers Into Level 3 | (46) | [2] | ||||||||||
Fair Value Assets, Transfers Out of Level 3 | 0 | [2] | 0 | [2] | ||||||||
Fair Value Assets, Ending Balance | 364 | [3] | 984 | [2] | ||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | (197) | [2] | (346) | [2] | ||||||||
Collateralized debt obligations [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 466 | 703 | ||||||||||
Fair Value Assets, Trading Revenue (Loss) | (35) | [1] | (39) | [1] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1] | ||||||||||
Purchases | 21 | 1 | ||||||||||
Fair Value Assets, Settlements | (41) | (82) | ||||||||||
Transfers Into Level 3 | 0 | |||||||||||
Fair Value Assets, Ending Balance | 481 | 661 | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 35 | 33 | ||||||||||
Corporate and other domestic [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 1,861 | 1,679 | ||||||||||
Fair Value Assets, Trading Revenue (Loss) | (7) | [1] | (20) | [1] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1] | ||||||||||
Purchases | 15 | 82 | ||||||||||
Fair Value Assets, Settlements | (359) | (28) | ||||||||||
Fair Value Assets, Ending Balance | 1,524 | 1,753 | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 4 | 20 | ||||||||||
Foreign debt securities [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 299 | 253 | ||||||||||
Fair Value Assets, Trading Revenue (Loss) | 5 | [1] | (41) | [1] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1] | ||||||||||
Purchases | 0 | |||||||||||
Fair Value Assets, Settlements | 0 | |||||||||||
Transfers Into Level 3 | 0 | |||||||||||
Fair Value Assets, Ending Balance | 294 | 294 | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | (5) | 41 | ||||||||||
Government debt securities issued by foreign entities [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 311 | |||||||||||
Fair Value Assets, Trading Revenue (Loss) | (22) | [1] | ||||||||||
Fair Value Assets, Other Revenue | 0 | [1] | ||||||||||
Purchases | 0 | |||||||||||
Fair Value Assets, Settlements | (190) | |||||||||||
Fair Value Assets, Ending Balance | 143 | |||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 19 | |||||||||||
Equity securities [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 9 | 13 | ||||||||||
Fair Value Assets, Trading Revenue (Loss) | (2) | [1] | 0 | [1] | ||||||||
Fair Value Assets, Other Revenue | 0 | [1] | ||||||||||
Fair Value Assets, Settlements | 0 | 0 | ||||||||||
Fair Value Assets, Ending Balance | 11 | 13 | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 2 | 3 | ||||||||||
Loans [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 11 | [3] | ||||||||||
Fair Value Assets, Transfers Out of Level 3 | (11) | [3] | ||||||||||
Fair Value Assets, Ending Balance | 0 | [3] | ||||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | (12) | [3] | ||||||||||
Mortgage servicing rights [Member]
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Assets, Beginning Balance | 168 | [4] | 220 | [4] | ||||||||
Fair Value Assets, Other Revenue | (16) | [1],[4] | 0 | [1],[4] | ||||||||
Fair Value Assets, Issuances | 6 | [4] | 8 | [4] | ||||||||
Fair Value Assets, Settlements | 0 | [4] | ||||||||||
Fair Value Assets, Ending Balance | 190 | [4] | 228 | [4] | ||||||||
Fair Value Assets, Current Period Unrealized Gains (Losses) | 16 | [4] | 0 | [4] | ||||||||
Deposits In Domestic Office [Member]
|
||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Liability, Beginning Balance | (2,636) | (2,867) | ||||||||||
Fair Value Liability, Trading Revenue (Loss) | (40) | [1] | 56 | [1] | ||||||||
Fair Value Liability, Purchases | 0 | 0 | ||||||||||
Fair Value Liability, Issuances | (404) | (287) | ||||||||||
Fair Value Liability, Settlements | 108 | 82 | ||||||||||
Fair Value Liability, Transfers Into Level 3 | 11 | 3 | ||||||||||
Fair Value Liability, Transfers Out of Level 3 | 85 | 161 | ||||||||||
Fair Value Liability, Ending Balance | (2,876) | (2,964) | ||||||||||
Fair Value Liability, Current Period Unrealized Gains (Losses) | (32) | (41) | ||||||||||
Long-term Debt [Member]
|
||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Fair Value Liability, Beginning Balance | (429) | (86) | ||||||||||
Fair Value Liability, Trading Revenue (Loss) | (31) | [1] | 1 | [1] | ||||||||
Fair Value Liability, Purchases | 0 | 0 | ||||||||||
Fair Value Liability, Issuances | (210) | (89) | ||||||||||
Fair Value Liability, Settlements | 51 | 3 | ||||||||||
Fair Value Liability, Transfers Into Level 3 | 0 | 0 | ||||||||||
Fair Value Liability, Transfers Out of Level 3 | 1 | 13 | ||||||||||
Fair Value Liability, Ending Balance | (618) | (160) | ||||||||||
Fair Value Liability, Current Period Unrealized Gains (Losses) | $ (25) | $ 0 | ||||||||||
|
Guarantee Arrangements and Pledged Assets (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Contractual Amounts of our Sell Protection Credit Derivatives and Major Off-Balance Sheet Guarantee Arrangements | The following table presents total carrying value and contractual amounts of our sell protection credit derivatives and major off-balance sheet guarantee arrangements as of March 31, 2013 and December 31, 2012. Following the table is a description of the various arrangements.
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Net Credit Derivative Positions | The following table summarizes our net credit derivative positions as of March 31, 2013 and December 31, 2012.
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Summary of Credit Ratings of Credit Risk Related Guarantees | Below is a summary of the credit ratings of credit risk related guarantees including the credit ratings of counterparties against which we sold credit protection and financial standby letters of credit as of March 31, 2013 as an indicative proxy of payment risk:
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Trend in Repurchase Demands Received on Loans Sold to GSEs and Other Third Parties by Loan Origination Vintage | The following table shows the trend in repurchase demands received on loans sold to GSEs and other third parties by loan origination vintage for the three months ended March 31, 2013 and 2012:
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Outstanding Repurchase Demands Received From GSEs and Other Third Parties | The following table provides information about outstanding repurchase demands received from GSEs and other third parties at March 31, 2013 and December 31, 2012:
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Summary of Change in Estimated Repurchase Liability for Loans Sold to GSEs and Other Third Parties | The following table summarizes the change in our estimated repurchase liability for loans sold to the GSEs and other third parties during the three months ended March 31, 2013 and December 31, 2012 for obligations arising from the breach of representations and warranties associated with the sale of these loans:
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Summary of Pledged Assets Included in Consolidated Balance Sheet | The following table presents pledged assets included in the consolidated balance sheet.
|
Fair Value Option (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Fair Value Option [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Gain on Instruments at Fair Value and Related Derivatives | The components of gain (loss) on instruments designated at fair value and related derivatives related to the changes in fair value of the financial instrument accounted for under FVO are as follows:
|
Loans - Status of Commercial Loan Portfolio (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
---|---|---|---|
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual Loans | $ 1,466 | $ 1,629 | |
Accruing Loans Contractually Past Due 90 days or More | 40 | 80 | |
Total loans | 62,932 | 63,258 | 53,869 |
Commercial Loan [Member]
|
|||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing Loans | 43,307 | 43,650 | |
Nonaccrual Loans | 327 | 463 | |
Accruing Loans Contractually Past Due 90 days or More | 5 | 37 | |
Total loans | 43,639 | 44,150 | |
Commercial Loan [Member] | Construction and Other Real Estate [Member]
|
|||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing Loans | 8,052 | 8,064 | |
Nonaccrual Loans | 265 | 385 | |
Accruing Loans Contractually Past Due 90 days or More | 2 | 8 | |
Total loans | 8,319 | 8,457 | 7,777 |
Commercial Loan [Member] | Business Banking and Middle Markets Enterprises [Member]
|
|||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing Loans | 12,693 | 12,533 | |
Nonaccrual Loans | 30 | 47 | |
Accruing Loans Contractually Past Due 90 days or More | 2 | 28 | |
Total loans | 12,725 | 12,608 | 10,889 |
Commercial Loan [Member] | Global Banking [Member]
|
|||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing Loans | 19,700 | 19,991 | |
Nonaccrual Loans | 18 | 18 | |
Accruing Loans Contractually Past Due 90 days or More | 0 | 0 | |
Total loans | 19,718 | 20,009 | 13,852 |
Commercial Loan [Member] | Other Commercial [Member]
|
|||
Financing Receivable, Recorded Investment [Line Items] | |||
Performing Loans | 2,862 | 3,062 | |
Nonaccrual Loans | 14 | 13 | |
Accruing Loans Contractually Past Due 90 days or More | 1 | 1 | |
Total loans | $ 2,877 | $ 3,076 | $ 3,051 |
Derivative Financial Instruments - Fair Value of Derivative Instruments, Designated and Qualifying As Cash Flow Hedges (Detail) (Interest rate contracts [Member], USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
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---|---|---|---|---|---|---|
Other assets
|
||||||
Derivatives, Fair Value [Line Items] | ||||||
Derivative Assets | $ 17 | [1] | $ 47 | [1] | ||
Interest taxes and other liabilities [Member]
|
||||||
Derivatives, Fair Value [Line Items] | ||||||
Derivative Liabilities | $ 198 | [1] | $ 236 | [1] | ||
|
Allowance for Credit Losses (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Allowance For Credit Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of the Allowance for Credit Losses | An analysis of the allowance for credit losses is presented in the following table.
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Summary of Changes in the Allowance for Credit Losses and the Related Loan Balance by Product | The following table summarizes the changes in the allowance for credit losses by product and the related loan balance by product during the three months ended March 31, 2013 and 2012:
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Discontinued Operations - Additional Information (Detail) (Credit Card Receivable [Member], USD $)
|
1 Months Ended | |
---|---|---|
Jan. 31, 2012
|
May 31, 2012
|
|
Credit Card Receivable [Member]
|
||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amortized cost or fair value adjustments | $ 333,000,000 | |
Cash consideration received upon sale of discontinued operations | $ 19,200,000,000 |
Loans - Summary of TDR and Related Credit Loss Reserves for TDR Loans (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | $ 1,243 | [1],[2],[3] | $ 1,434 | [1],[2],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 108 | [4] | 140 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 1,466 | 1,701 | ||||||||||||
Commercial Loan [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 361 | [1],[3] | 460 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 23 | [4] | 26 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 424 | 569 | ||||||||||||
Commercial Loan [Member] | Construction and Other Real Estate [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 297 | [1],[3] | 343 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 21 | [4] | 23 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 318 | 398 | ||||||||||||
Commercial Loan [Member] | Business Banking and Middle Markets Enterprises [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 34 | [1],[3] | 86 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 2 | [4] | 3 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 73 | 137 | ||||||||||||
Commercial Loan [Member] | Other Commercial [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 30 | [1],[3] | 31 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 0 | [4] | 0 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 33 | 34 | ||||||||||||
Consumer Loans [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 882 | [1],[3] | 974 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 85 | [4] | 114 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 1,042 | 1,132 | ||||||||||||
Consumer Loans [Member] | Residential Mortgage [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 869 | [1],[3],[5] | 960 | [1],[3],[5] | ||||||||||
Allowance for credit losses on TDR Loans | 80 | [4] | 109 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | 1,029 | 1,118 | ||||||||||||
Consumer Loans [Member] | Credit Card Receivables [Member]
|
||||||||||||||
Financing Receivable, Impaired [Line Items] | ||||||||||||||
TDR Loans | 13 | [1],[3] | 14 | [1],[3] | ||||||||||
Allowance for credit losses on TDR Loans | 5 | [4] | 5 | [4] | ||||||||||
Unpaid Principal Balance of TDR Loans | $ 13 | $ 14 | ||||||||||||
|
Income Taxes - Additional Information (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefit, affect the effective tax rate | $ 329 | $ 319 |
Accruals for payment of interest and penalties associated with uncertain tax positions | 169 | 159 |
Increase in accruals for payment of interest and penalties associated with uncertain tax positions | 10 | |
Net deferred tax is a combination of deferred tax liabilities and valuation allwance | 967 | 905 |
Tax Reserve | 265 | |
Accrued interest expenses to recognize the estimated tax exposure | $ 139 |
Securities - Additional Information (Detail) (USD $)
|
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
security
|
Mar. 31, 2012
|
Dec. 31, 2012
security
|
|
Schedule of Available-for-sale Securities [Line Items] | |||
Held-to-maturity Securities, Sold Security, at Carrying Value | $ 71,000,000 | ||
Percentage of debt securities issued by US Treasury, US Government Agencies and government sponsored entities | 89.00% | 90.00% | |
Temporary impairment losses recognized credit loss | 0 | 0 | |
Non-credit component unrealized loss amounts recognized | 0 | 0 | |
Assets backed securities in available for sale portfolio | 27 | 27 | |
Assets backed securities wrapped by monoline insurance company | 8 | 8 | |
Value of Asset Backed Securities Backed by Insurance Company | 339,000,000 | 343,000,000 | |
Fair value of Assets Backed Securities | 526,000,000 | 557,000,000 | |
Unrealized Losses on Assets backed securities, Gross | 61,000,000 | 69,000,000 | |
Fair Value of Financial Guarantee from Insurance Company for the purpose of evaluating other then temporary Impairment | 110,000,000 | 110,000,000 | |
Security wrapped by below investment grade monoline insurance was deemed to be other-than-temporarily impaired | 0 | 0 | |
Federal Home Loan Bank [Member]
|
|||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in stock were included in other assets | 143,000,000 | ||
Federal Reserve Bank [Member]
|
|||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in stock were included in other assets | $ 483,000,000 |
Business Segments (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary on Reconciliation of Results under IFRS to US GAAP | Results for each segment on an IFRSs basis, as well as a reconciliation of total results under IFRSs to U.S. GAAP consolidated totals, are provided in the following tables.
|
Organization
|
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2013
|
||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Organization | Organization HSBC USA Inc. (“HSBC USA”), incorporated under the laws of Maryland, is a New York State based bank holding company and an indirect wholly-owned subsidiary of HSBC North America Holdings Inc. (“HSBC North America”), which is an indirect wholly-owned subsidiary of HSBC Holdings plc (“HSBC”). The accompanying unaudited interim consolidated financial statements of HSBC USA Inc. and its subsidiaries (collectively “HUSI”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as well as in accordance with predominant practices within the banking industry. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods have been made. HSBC USA (together with its subsidiaries, “HUSI”) may also be referred to in these notes to the consolidated financial statements as “we,” “us” or “our.” These unaudited interim consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”). Certain reclassifications have been made to prior period amounts to conform to the current period presentation. The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Unless otherwise noted, information included in these notes to the consolidated financial statements relates to continuing operations for all periods presented. See Note 2, “Discontinued Operations” for further details. Interim results should not be considered indicative of results in future periods. |
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | $ 173,689 | $ 189,193 | ||||||||||||||||
Netting, Assets | (77,825) | [1],[2] | (83,367) | [1],[2] | ||||||||||||||
Gross Balance, Liabilities | 110,547 | 116,728 | ||||||||||||||||
Netting, Liabilities | (73,879) | [1],[2] | (79,580) | [1],[2] | ||||||||||||||
Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 172 | 173 | ||||||||||||||||
Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 4,678 | 831 | ||||||||||||||||
Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 570 | 4,522 | ||||||||||||||||
Deposits in domestic offices
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 8,376 | 8,692 | [3] | |||||||||||||||
Trading Liabilities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 7,027 | 5,974 | ||||||||||||||||
Derivatives [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 87,454 | [4] | 94,782 | [4] | ||||||||||||||
Netting, Liabilities | (73,879) | [1],[4] | (79,580) | [1],[4] | ||||||||||||||
Derivatives [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 64,311 | [4] | 71,658 | [4] | ||||||||||||||
Derivatives [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 14,386 | [4] | 13,618 | [4] | ||||||||||||||
Derivatives [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 1,426 | [4] | 1,417 | [4] | ||||||||||||||
Derivatives [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 622 | [4] | 738 | [4] | ||||||||||||||
Derivatives [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 6,709 | [4] | 7,351 | [4] | ||||||||||||||
Derivatives [Member] | Derivatives netting [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Netting, Liabilities | (73,879) | [1],[4] | (79,580) | [1],[4] | ||||||||||||||
Long-term Debt [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 7,690 | [5] | 7,280 | [5] | ||||||||||||||
Trading securities, excluding derivatives [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,950 | 2,896 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 33 | 36 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Commodities Investment [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 15,875 | 12,332 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,651 | 2,853 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Collateralized debt obligations [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 545 | 466 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 159 | 221 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 378 | 767 | ||||||||||||||||
Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 5,715 | 5,920 | ||||||||||||||||
Derivative Assets [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 87,732 | [4] | 95,353 | [4] | ||||||||||||||
Netting, Assets | (77,825) | [1],[4] | (83,367) | [1],[4] | ||||||||||||||
Derivative Assets [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 63,912 | [4] | 71,823 | [4] | ||||||||||||||
Derivative Assets [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 14,368 | [4] | 13,851 | [4] | ||||||||||||||
Derivative Assets [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,957 | [4] | 1,759 | [4] | ||||||||||||||
Derivative Assets [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 805 | [4] | 791 | [4] | ||||||||||||||
Derivative Assets [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 6,690 | [4] | 7,129 | [4] | ||||||||||||||
Derivative Assets [Member] | Derivatives netting [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Netting, Assets | (77,825) | [1],[4] | (83,367) | [1],[4] | ||||||||||||||
Available-for-sale Securities [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 26 | 26 | ||||||||||||||||
Available-for-sale Securities [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 52,716 | 60,695 | ||||||||||||||||
Available-for-sale Securities [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1 | 1 | ||||||||||||||||
Available-for-sale Securities [Member] | Asset backed securities [Member] | Commercial mortgages [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 185 | 214 | ||||||||||||||||
Available-for-sale Securities [Member] | Asset backed securities [Member] | Home Equity Line of Credit [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 255 | 258 | ||||||||||||||||
Available-for-sale Securities [Member] | Asset backed securities [Member] | Others [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 85 | 84 | ||||||||||||||||
Available-for-sale Securities [Member] | Obligations of U.S. states and political subdivisions [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 770 | 912 | ||||||||||||||||
Loans [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 3 | [6] | 465 | [6] | ||||||||||||||
Mortgage servicing rights [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 190 | [7] | 168 | [7] | ||||||||||||||
Level 1 [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 36,155 | 46,142 | ||||||||||||||||
Gross Balance, Liabilities | 949 | 341 | ||||||||||||||||
Level 1 [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 41 | 42 | ||||||||||||||||
Level 1 [Member] | Trading Liabilities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 841 | 207 | ||||||||||||||||
Level 1 [Member] | Derivatives [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 108 | [4] | 134 | [4] | ||||||||||||||
Level 1 [Member] | Derivatives [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 99 | [4] | 90 | [4] | ||||||||||||||
Level 1 [Member] | Derivatives [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 1 | [4] | 25 | [4] | ||||||||||||||
Level 1 [Member] | Derivatives [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 8 | [4] | 19 | [4] | ||||||||||||||
Level 1 [Member] | Trading securities, excluding derivatives [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,234 | 2,484 | ||||||||||||||||
Level 1 [Member] | Derivative Assets [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 229 | [4] | 237 | [4] | ||||||||||||||
Level 1 [Member] | Derivative Assets [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 77 | [4] | 98 | [4] | ||||||||||||||
Level 1 [Member] | Derivative Assets [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 17 | [4] | 4 | [4] | ||||||||||||||
Level 1 [Member] | Derivative Assets [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 135 | [4] | 135 | [4] | ||||||||||||||
Level 1 [Member] | Available-for-sale Securities [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 34,651 | 43,379 | ||||||||||||||||
Level 2 [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 133,571 | 138,572 | ||||||||||||||||
Gross Balance, Liabilities | 105,322 | 112,533 | ||||||||||||||||
Level 2 [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 172 | 173 | ||||||||||||||||
Level 2 [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 4,678 | 831 | ||||||||||||||||
Level 2 [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 529 | 4,480 | ||||||||||||||||
Level 2 [Member] | Deposits in domestic offices
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 5,500 | [3] | 6,056 | [3] | ||||||||||||||
Level 2 [Member] | Trading Liabilities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 6,186 | 5,767 | ||||||||||||||||
Level 2 [Member] | Derivatives [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 86,564 | [4] | 93,859 | [4] | ||||||||||||||
Level 2 [Member] | Derivatives [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 64,212 | [4] | 71,567 | [4] | ||||||||||||||
Level 2 [Member] | Derivatives [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 14,362 | [4] | 13,582 | [4] | ||||||||||||||
Level 2 [Member] | Derivatives [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 1,269 | [4] | 1,244 | [4] | ||||||||||||||
Level 2 [Member] | Derivatives [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 592 | [4] | 712 | [4] | ||||||||||||||
Level 2 [Member] | Derivatives [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 6,129 | [4] | 6,754 | [4] | ||||||||||||||
Level 2 [Member] | Long-term Debt [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 7,072 | [5] | 6,851 | [5] | ||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 426 | 1,035 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 22 | 27 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Commodities Investment [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 15,875 | 12,332 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 417 | 369 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Collateralized debt obligations [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 64 | 0 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 159 | 221 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 84 | 468 | ||||||||||||||||
Level 2 [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 5,572 | 5,609 | ||||||||||||||||
Level 2 [Member] | Derivative Assets [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 86,183 | [4] | 93,751 | [4] | ||||||||||||||
Level 2 [Member] | Derivative Assets [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 63,829 | [4] | 71,717 | [4] | ||||||||||||||
Level 2 [Member] | Derivative Assets [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 14,194 | [4] | 13,831 | [4] | ||||||||||||||
Level 2 [Member] | Derivative Assets [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,766 | [4] | 1,593 | [4] | ||||||||||||||
Level 2 [Member] | Derivative Assets [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 648 | [4] | 649 | [4] | ||||||||||||||
Level 2 [Member] | Derivative Assets [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 5,746 | [4] | 5,961 | [4] | ||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 26 | 26 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 18,065 | 17,316 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1 | 1 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Commercial mortgages [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 185 | 214 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Home Equity Line of Credit [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 255 | 258 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Others [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 85 | 84 | ||||||||||||||||
Level 2 [Member] | Available-for-sale Securities [Member] | Obligations of U.S. states and political subdivisions [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 770 | 912 | ||||||||||||||||
Level 2 [Member] | Loans [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 3 | [6] | 465 | [6] | ||||||||||||||
Level 3 [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 3,963 | 4,479 | ||||||||||||||||
Gross Balance, Liabilities | 4,276 | 3,854 | ||||||||||||||||
Level 3 [Member] | Deposits in domestic offices
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 2,876 | [3] | 2,636 | [3] | ||||||||||||||
Level 3 [Member] | Derivatives [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 782 | [4] | 789 | [5] | ||||||||||||||
Level 3 [Member] | Derivatives [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 0 | [4] | 1 | [4] | ||||||||||||||
Level 3 [Member] | Derivatives [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 23 | [4] | 11 | [4] | ||||||||||||||
Level 3 [Member] | Derivatives [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 157 | [4] | 173 | [4] | ||||||||||||||
Level 3 [Member] | Derivatives [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 22 | [4] | 7 | [4] | ||||||||||||||
Level 3 [Member] | Derivatives [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 580 | [4] | 597 | [4] | ||||||||||||||
Level 3 [Member] | Long-term Debt [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Liabilities | 618 | [5] | 429 | [5] | ||||||||||||||
Level 3 [Member] | Trading securities, excluding derivatives [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,524 | 1,861 | ||||||||||||||||
Level 3 [Member] | Trading securities, excluding derivatives [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 11 | 9 | ||||||||||||||||
Level 3 [Member] | Trading securities, excluding derivatives [Member] | Collateralized debt obligations [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 481 | 466 | ||||||||||||||||
Level 3 [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 294 | 299 | ||||||||||||||||
Level 3 [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 143 | 311 | ||||||||||||||||
Level 3 [Member] | Derivative Assets [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 1,320 | [4] | 1,365 | [4] | ||||||||||||||
Level 3 [Member] | Derivative Assets [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 6 | [4] | 8 | [4] | ||||||||||||||
Level 3 [Member] | Derivative Assets [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 157 | [4] | 16 | [4] | ||||||||||||||
Level 3 [Member] | Derivative Assets [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 191 | [4] | 166 | [4] | ||||||||||||||
Level 3 [Member] | Derivative Assets [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 22 | [4] | 7 | [4] | ||||||||||||||
Level 3 [Member] | Derivative Assets [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 944 | [4] | 1,168 | [4] | ||||||||||||||
Level 3 [Member] | Loans [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 0 | [6] | ||||||||||||||||
Level 3 [Member] | Mortgage servicing rights [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Gross Balance, Assets | 190 | [7] | 168 | [7] | ||||||||||||||
Estimate of fair value [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 95,864 | 105,826 | ||||||||||||||||
Net Balance, Liabilities | 36,668 | 37,148 | ||||||||||||||||
Estimate of fair value [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 172 | 173 | ||||||||||||||||
Estimate of fair value [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 4,678 | 831 | ||||||||||||||||
Estimate of fair value [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 570 | 4,522 | ||||||||||||||||
Estimate of fair value [Member] | Deposits in domestic offices
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 8,376 | [3] | 8,692 | [3] | ||||||||||||||
Estimate of fair value [Member] | Trading Liabilities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 7,027 | 5,974 | ||||||||||||||||
Estimate of fair value [Member] | Derivatives [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 13,575 | [4] | 15,202 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 64,311 | [4] | 71,658 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 14,386 | [4] | 13,618 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 1,426 | [4] | 1,417 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 622 | [4] | 738 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 6,709 | [4] | 7,351 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivatives [Member] | Derivatives netting [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | (73,879) | [4] | (79,580) | [4] | ||||||||||||||
Estimate of fair value [Member] | Long-term Debt [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Liabilities | 7,690 | [5] | 7,280 | [5] | ||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 1,950 | 2,896 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Equity securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 33 | 36 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Commodities Investment [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 15,875 | 12,332 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 1,651 | 2,853 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Collateralized debt obligations [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 545 | 466 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 159 | 221 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | Large corporate [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 378 | 767 | ||||||||||||||||
Estimate of fair value [Member] | Trading securities, excluding derivatives [Member] | Foreign debt securities [Member] | US Government Agency Issued or Guaranteed [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 5,715 | 5,920 | ||||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 9,907 | [4] | 11,986 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Interest rate contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 63,912 | [4] | 71,823 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Foreign exchange contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 14,368 | [4] | 13,851 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Equity contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 1,957 | [4] | 1,759 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Precious metals contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 805 | [4] | 791 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Credit contracts [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 6,690 | [4] | 7,129 | [4] | ||||||||||||||
Estimate of fair value [Member] | Derivative Assets [Member] | Derivatives netting [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | (77,825) | [4] | (83,367) | [4] | ||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Corporate and other domestic debt securities [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 26 | 26 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | U.S. Treasury [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 52,716 | 60,695 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Residential Mortgage [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 1 | 1 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Commercial mortgages [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 185 | 214 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Home Equity Line of Credit [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 255 | 258 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Asset backed securities [Member] | Others [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 85 | 84 | ||||||||||||||||
Estimate of fair value [Member] | Available-for-sale Securities [Member] | Obligations of U.S. states and political subdivisions [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 770 | 912 | ||||||||||||||||
Estimate of fair value [Member] | Loans [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | 3 | [6] | 465 | [6] | ||||||||||||||
Estimate of fair value [Member] | Mortgage servicing rights [Member]
|
||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||
Net Balance, Assets | $ 190 | [7] | $ 168 | [7] | ||||||||||||||
|
Related Party Transactions - Summary of Related Party Transactions (Parenthetical) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|||||
Income/(Expense): | ||||||
Interest income | $ 740 | $ 838 | ||||
Interest expense | (235) | (251) | ||||
Net interest income | 505 | [1] | 587 | [1] | ||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 54 | 56 | ||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | (324) | (368) | ||||
Parent And Other Subsidiaries Of Common Parent [Member]
|
||||||
Income/(Expense): | ||||||
Interest income | 22 | 13 | ||||
Interest expense | (20) | (24) | ||||
Net interest income | 2 | (11) | ||||
Servicing and other fees with HSBC affiliates: | ||||||
Residential mortgage banking revenue | 0 | 2 | ||||
Support services from HSBC affiliates: | ||||||
Stock based compensation expense with HSBC | (9) | (12) | ||||
Hsbc Finance And Other Hsbc Affiliates [Member]
|
||||||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 54 | 56 | ||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | (324) | (368) | ||||
HSBC Finance [Member]
|
||||||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 21 | 14 | ||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | (4) | (10) | ||||
HSBC Markets [Member]
|
||||||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 5 | 5 | ||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | (52) | (73) | ||||
Other HSBC Affiliates [Member]
|
||||||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 16 | 28 | ||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | (35) | (51) | ||||
Other HSBC Affiliates Income [Member]
|
||||||
Servicing and other fees with HSBC affiliates: | ||||||
Total affiliate income | 12 | 9 | ||||
HSBC Technology and Services [Member]
|
||||||
Support services from HSBC affiliates: | ||||||
Total support services from HSBC affiliates | $ (233) | $ (234) | ||||
|
Loans - Components of Loans (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
||||
---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans | $ 62,932 | $ 63,258 | $ 53,869 | ||||
Commercial Loan [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total commercial | 43,639 | 44,150 | |||||
Total loans | 43,639 | 44,150 | |||||
Commercial Loan [Member] | Construction and Other Real Estate [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total commercial | 8,319 | 8,457 | |||||
Total loans | 8,319 | 8,457 | 7,777 | ||||
Commercial Loan [Member] | Business Banking and Middle Markets Enterprises [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total commercial | 12,725 | 12,608 | |||||
Total loans | 12,725 | 12,608 | 10,889 | ||||
Commercial Loan [Member] | Global Banking [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total commercial | 19,718 | [1] | 20,009 | [1] | |||
Total loans | 19,718 | 20,009 | 13,852 | ||||
Commercial Loan [Member] | Other Commercial [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total commercial | 2,877 | 3,076 | |||||
Total loans | 2,877 | 3,076 | 3,051 | ||||
Consumer Loans [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total consumer | 19,293 | 19,108 | |||||
Total loans | 19,293 | 19,108 | |||||
Consumer Loans [Member] | Home Equity Mortgages [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total consumer | 2,236 | 2,324 | |||||
Total loans | 2,236 | 2,324 | 2,491 | ||||
Consumer Loans [Member] | Residential Mortgage [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total consumer | 15,730 | 15,371 | |||||
Total loans | 15,730 | 15,371 | 14,344 | ||||
Consumer Loans [Member] | Credit Card Receivables [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total consumer | 749 | 815 | |||||
Total loans | 749 | 815 | 786 | ||||
Consumer Loans [Member] | Other Consumer [Member]
|
|||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total consumer | 578 | 598 | |||||
Total loans | $ 578 | $ 598 | $ 679 | ||||
|
Guarantee Arrangements and Pledged Assets - Carrying Value and Contractual Amounts of our Sell Protection Credit Derivatives and Major Off-Balance Sheet Guarantee Arrangements (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Credit derivatives [Member]
|
||
Guarantor Obligations [Line Items] | ||
Guarantee Arrangement for the benefit of Affiliates | $ 42,400 | $ 44,200 |
Financial standby letters of credit, net of participations [Member]
|
||
Guarantor Obligations [Line Items] | ||
Guarantee Arrangement for the benefit of Affiliates | $ 840 | $ 808 |