Goodwill

Goodwill was $2.2 billion at both March 31, 2013 and December 31, 2012, and includes accumulated impairment losses from prior years of $54 million.

Based on the results of our interim goodwill impairment testing in December 2012, including the historically narrow differences between fair value and book value in both our Global Banking and Markets and Global Private Banking reporting units, we performed an interim review of goodwill impairment for both of these reporting units during the first quarter of 2013. As a result of this testing, the fair value of these reporting units continued to exceed their carrying values, including goodwill. At March 31, 2013, the book value of our Global Banking and Markets reporting unit including allocated goodwill of $612 million, was 97 percent of fair value, while the book value of our Global Private Banking reporting unit including allocated goodwill of $415 million was less than 50 percent of its fair value. Our goodwill impairment testing is, however, highly sensitive to certain assumptions and estimates used. As our testing results continue to indicate that there is only a marginal excess of fair value over book value for our Global Banking and Markets reporting unit, we will continue to monitor this reporting unit and perform interim impairment testing in future periods as very small changes in projections could result in either partial or full goodwill impairment of this reporting unit. We continue to perform periodic analyses of the risks and strategies of all our business and product offerings. If deterioration in economic conditions occurs or changes in the strategy or performance of our businesses or product offerings occur, interim impairment tests in addition to Global Banking and Markets could be required in 2013.