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Business Segments
3 Months Ended
Mar. 31, 2014
Segment Reporting [Abstract]  
Business Segments
Business Segments
 
We have four distinct business segments that we utilize for management reporting and analysis purposes, which are aligned with HSBC's global businesses and business strategy. There have been no changes in the basis of our segmentation or measurement of segment profit as compared with the presentation in our 2013 Form 10-K.
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.
A summary of the significant differences between U.S. GAAP and IFRSs as they impact our results are presented in Note 25, "Business Segments," in our 2013 Form 10-K. There have been no significant changes since December 31, 2013 in the differences between U.S. GAAP and IFRSs impacting our results.


The following table summarizes the results for each segment on an IFRSs basis, as well as provides a reconciliation of total results under IFRSs to U.S. GAAP consolidated totals.
 
IFRSs Consolidated Amounts
 
 
 
 
 
 
  
RBWM
 
CMB
 
GB&M
 
PB
 
Other
 
Adjustments/
Reconciling
Items
 
Total
 
IFRSs
Adjustments(4)
 
IFRSs
Reclassi-
fications(5)
 
U.S. GAAP
Consolidated
Totals
 
(in millions)
Three Months Ended March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income(1)
$
198

 
$
187

 
$
97

 
$
49

 
$
(13
)
 
$
(5
)
 
$
513

 
$
(15
)
 
$
21

 
$
519

Other operating income
113

 
68

 
294

 
25

 
25

 
5

 
530

 
(4
)
 
(26
)
 
500

Total operating income
311

 
255

 
391

 
74

 
12

 

 
1,043

 
(19
)
 
(5
)
 
1,019

Loan impairment charges(3)
2

 
7

 
15

 
(5
)
 

 

 
19

 
4

 
(7
)
 
16

 
309

 
248

 
376

 
79

 
12

 

 
1,024

 
(23
)
 
2

 
1,003

Operating expenses(2)
279

 
158

 
239

 
55

 
25

 

 
756

 
(8
)
 
2

 
750

Profit before income tax expense
$
30

 
$
90

 
$
137

 
$
24

 
$
(13
)
 
$

 
$
268

 
$
(15
)
 
$

 
$
253

Balances at end of period:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
19,143

 
$
25,594

 
$
181,545

 
$
8,231

 
$
723

 
$

 
$
235,236

 
$
(47,888
)
 
$
(174
)
 
$
187,174

Total loans, net
16,177

 
24,509

 
17,485

 
6,022

 

 

 
64,193

 
1,411

 
2,719

 
68,323

Goodwill
581

 
358

 

 
325

 

 

 
1,264

 
348

 

 
1,612

Total deposits
30,206

 
21,254

 
30,126

 
12,529

 

 

 
94,115

 
(3,247
)
 
14,663

 
105,531

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

 
(17
)
 
4

 
569

 
26

 
(3
)
 
592

Total operating income
322

 
235

 
491

 
73

 
(31
)
 

 
1,090

 
9

 
(2
)
 
1,097

Loan impairment charges(3)
32

 
14

 
3

 
1

 

 

 
50

 
(23
)
 
(6
)
 
21

 
290

 
221

 
488

 
72

 
(31
)
 

 
1,040

 
32

 
4

 
1,076

Operating expenses(2)
291

 
162

 
230

 
60

 
21

 

 
764

 

 
4

 
768

Profit before income tax expense
$
(1
)
 
$
59

 
$
258

 
$
12

 
$
(52
)
 
$

 
$
276

 
$
32

 
$

 
$
308

Balances at end of period:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
19,634

 
$
20,919

 
$
204,160

 
$
7,831

 
$
164

 
$

 
$
252,708

 
$
(63,415
)
 
$
92

 
$
189,385

Total loans, net
16,747

 
19,449

 
17,063

 
5,722

 

 

 
58,981

 
1,194

 
2,189

 
62,364

Goodwill
581

 
358

 
480

 
325

 

 

 
1,744

 
484

 

 
2,228

Total deposits
34,253

 
21,464

 
32,476

 
12,941

 

 

 
101,134

 
(5,319
)
 
21,234

 
117,049

 
(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.