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CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Interest income:        
Loans $ 478 $ 456 $ 942 $ 919
Securities 225 280 453 585
Trading assets 27 26 51 59
Short-term investments 16 33 30 59
Other 11 10 21 21
Total interest income 757 805 1,497 1,643
Interest expense:        
Deposits 56 85 99 161
Short-term borrowings 8 6 17 15
Long-term debt 166 178 333 332
Other 9 1 25 13
Total interest expense 239 270 474 521
Net interest income 518 [1] 535 [1] 1,023 [1] 1,122 [1]
Provision for credit losses 67 [2] 89 [2] 88 [2] 89 [2]
Net interest income after provision for credit losses 451 446 935 1,033
Other revenues:        
Credit card fees 21 22 34 52
Other fees and commissions 176 185 346 396
Trust income 31 25 63 50
Trading revenue 107 84 271 282
Other securities gains, net 23 65 154 95
Servicing and other fees from HSBC affiliates 59 46 113 102
Residential mortgage banking revenue 9 2 55 27
Gain (loss) on instruments designated at fair value and related derivatives 115 141 88 (71)
Gain on sale of branches 0 330 0 330
Other income (loss) 25 (21) 34 0
Total other revenues 566 879 1,158 1,263
Operating expenses:        
Salaries and employee benefits 247 246 499 526
Support services from HSBC affiliates 362 386 686 771
Occupancy expense, net 57 57 116 116
Expense related to certain regulatory matters (Note 21) 0 700 0 700
Other expenses 122 178 276 327
Total operating expenses 788 [3] 1,567 [3] 1,577 [3] 2,440 [3]
Income (loss) from continuing operations before income tax expense 229 (242) 516 (144)
Income tax expense 49 351 153 369
Income (loss) from continuing operations 180 (593) 363 (513)
Discontinued Operations (Note 2):        
Income from discontinued operations before income tax expense 0 74 0 315
Income tax expense 0 26 0 112
Income from discontinued operations 0 48 0 203
Net income (loss) $ 180 $ (545) $ 363 $ (310)
[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] The provision assigned to the segments is based on the segments’ net charge offs and the change in allowance for credit losses.
[3] Expenses for the segments include fully apportioned corporate overhead expenses.