Retained Earnings and Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2013

Banking and Thrift [Abstract]

Retained Earnings and Regulatory Capital Requirements

Retained Earnings and Regulatory Capital Requirements

The following table summarizes the capital amounts and ratios of HSBC USA Inc. and HSBC Bank USA, calculated in accordance with current banking regulations.

	September 30, 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.	$	20,482	10.00	%		16.30	%	$	20,764	10.00	%		19.52	%
HSBC Bank USA	21,374		10.00			18.01		21,464		10.00			21.07
Tier 1 capital ratio:
HSBC USA Inc.	14,652		6.00			11.66		14,480		6.00			13.61
HSBC Bank USA	15,817		6.00			13.33		15,482		6.00			15.20
Tier 1 common ratio:
HSBC USA Inc.	12,544		5.00		(2)	9.98		12,373		5.00		(2)	11.63
HSBC Bank USA	15,817		5.00			13.33		15,482		5.00			15.20
Tier 1 leverage ratio:
HSBC USA Inc.	14,652		3.00		(3)	8.40		14,480		3.00		(3)	7.70
HSBC Bank USA	15,817		5.00			9.30		15,482		5.00			8.43
Risk weighted assets:
HSBC USA Inc.	125,641							106,395
HSBC Bank USA	118,656							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.

The regulatory capital ratios in 2013 reflect the impact of the U.S. market risk final rule (known as Basel 2.5).

We did not receive any cash capital contributions from our immediate parent, HNAI during the first nine months of 2013. We did not make any capital contributions to our subsidiary, HSBC Bank USA, during the nine months ended September 30, 2013.

Regulatory guidelines impose certain restrictions that may limit the inclusion of deferred tax assets in the computation of regulatory capital. We closely monitor the deferred tax assets for potential limitations or exclusions. At September 30, 2013 and December 31, 2012, deferred tax assets of $701 million and $622 million, respectively, were excluded in the computation of regulatory capital.