XML 15 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONSOLIDATED STATEMENT OF INCOME (LOSS) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Interest income:      
Loans $ 2,241 $ 2,284 $ 2,096
Securities 952 956 898
Trading securities 209 262 340
Short-term investments 669 365 108
Other 52 43 59
Total interest income 4,123 3,910 3,501
Interest expense:      
Deposits 703 468 260
Short-term borrowings 124 79 46
Long-term debt 998 864 709
Other 25 15 16
Total interest expense 1,850 1,426 1,031
Net interest income [1] 2,273 2,484 2,470
Provision for credit losses (165) 372 [2] 361
Net interest income after provision for credit losses 2,438 2,112 2,109
Other revenues:      
Credit card fees 46 52 43
Trust and investment management fees 156 153 170
Other fees and commissions 669 721 743
Trading revenue 354 227 74
Other securities gains, net 52 70 48
Servicing and other fees from HSBC affiliates 348 289 276
Residential mortgage banking revenue (expense) (6) 16 62
Gain (loss) on instruments designated at fair value and related derivatives 43 (71) 264
Other income (loss) 340 (53) 55
Total other revenues [3] 2,002 1,404 1,735
Operating expenses:      
Salaries and employee benefits 1,077 981 1,000
Support services from HSBC affiliates 1,549 1,495 1,556
Occupancy expense, net 202 171 172
Other expenses 563 651 556
Total operating expenses [3] 3,391 3,298 [4] 3,284 [4]
Income before income tax 1,049 218 560
Income tax expense 1,228 89 230
Net income (loss) $ (179) $ 129 $ 330
[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 Balance Sheet Management and more appropriately reflect the profitability of the segments.
[2] The provision for credit losses and charge-offs for residential mortgage loans during 2016 includes $11 million related to the lower of amortized cost or fair value adjustment attributable to credit factors for loans transferred to held for sale. See Note 7, "Loans Held for Sale," for additional information.
[3] Expenses for the segments include fully apportioned corporate overhead expenses.
[4] In 2017, we changed our presentation for certain cost reimbursements that were previously netted as an offset to affiliate expense. We now present these reimbursements gross in affiliate income. As a result, we have reclassified prior year amounts in order to conform to the current year presentation, which increased both RBWM other operating income and RBWM operating expenses $11 million during the year ended December 31, 2016 and also increased both GB&M other operating income and GB&M operating expenses $61 million and $63 million during the years ended December 31, 2016 and 2015, respectively. See Note 21, "Related Party Transactions," in the accompanying consolidated financial statements for additional information.