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Loans (Tables)
12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Components of Loans
Loans consisted of the following:
At December 31,
2017
 
2016
 
(in millions)
Commercial loans:
 
 
 
Real estate, including construction
$
10,533

 
$
10,890

Business and corporate banking
12,504

 
14,080

Global banking(1)(2)
20,088

 
23,481

Other commercial(2)
9,910

 
5,765

Total commercial
53,035

 
54,216

Consumer loans:
 
 
 
Residential mortgages
17,273

 
17,181

Home equity mortgages
1,191

 
1,408

Credit cards
721

 
688

Other consumer
343

 
382

Total consumer
19,528

 
19,659

Total loans
$
72,563

 
$
73,875

 
(1) 
Represents large multinational firms including globally focused U.S. corporate and financial institutions, U.S. dollar lending to multinational banking clients managed by HSBC on a global basis and complex large business clients supported by Global Banking and Markets relationship managers.
(2) 
During 2017, in conjunction with the creation of the new Corporate Center segment as discussed further in Note 22, "Business Segments," we reclassified loans to HSBC affiliates from global banking to other commercial and revised prior periods to conform with the current year presentation. As a result, other commercial includes loans to HSBC affiliates which totaled $6,750 million and $3,274 million at December 31, 2017 and 2016, respectively. All tables below have been restated to reflect this reclassification, as applicable. See Note 21, "Related Party Transactions," for additional information regarding loans to HSBC affiliates.
Summary of Past Due Status of Loans
The following table summarizes the past due status of our loans, excluding loans held for sale, at December 31, 2017 and 2016. The aging of past due amounts is determined based on the contractual delinquency status of payments under the loan. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status is affected by customer account management policies and practices such as re-age, which results in the re-setting of the contractual delinquency status to current.
 
Past Due
 
Total Past Due 30 Days or More
 
 
 
 
At December 31, 2017
30 - 89 Days
 
90+ Days
 
 
Current(1)
 
Total Loans
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
27

 
$
9

 
$
36

 
$
10,497

 
$
10,533

Business and corporate banking
25

 
5

 
30

 
12,474

 
12,504

Global banking

 
25

 
25

 
20,063

 
20,088

Other commercial
43

 

 
43

 
9,867

 
9,910

Total commercial
95

 
39

 
134

 
52,901

 
53,035

Consumer loans:
 
 
 
 
 
 
 
 
 
Residential mortgages
369

 
344

 
713

 
16,560

 
17,273

Home equity mortgages
11

 
36

 
47

 
1,144

 
1,191

Credit cards
8

 
9

 
17

 
704

 
721

Other consumer
5

 
7

 
12

 
331

 
343

Total consumer
393

 
396

 
789

 
18,739

 
19,528

Total loans
$
488

 
$
435

 
$
923

 
$
71,640

 
$
72,563

 
Past Due
 
Total Past Due 30 Days or More
 
 
 
 
At December 31, 2016
30 - 89 Days
 
90+ Days
 
 
Current(1)
 
Total Loans
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
17

 
$
6

 
$
23

 
$
10,867

 
$
10,890

Business and corporate banking
35

 
9

 
44

 
14,036

 
14,080

Global banking
1

 
64

 
65

 
23,416

 
23,481

Other commercial
4

 
7

 
11

 
5,754

 
5,765

Total commercial
57

 
86

 
143

 
54,073

 
54,216

Consumer loans:
 
 
 
 
 
 
 
 
 
Residential mortgages
402

 
317

 
719

 
16,462

 
17,181

Home equity mortgages
10

 
43

 
53

 
1,355

 
1,408

Credit cards
9

 
10

 
19

 
669

 
688

Other consumer
7

 
7

 
14

 
368

 
382

Total consumer
428

 
377

 
805

 
18,854

 
19,659

Total loans
$
485

 
$
463

 
$
948

 
$
72,927

 
$
73,875


 
(1) 
Loans less than 30 days past due are presented as current.
Schedule of Receivables, Contractual Maturities
Contractual maturities of loans outstanding at December 31, 2017 were as follows:
  
2018
 
2019
 
2020
 
2021
 
2022
 
Thereafter
 
Total
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
4,870

 
$
1,538

 
$
1,231

 
$
1,098

 
$
977

 
$
819

 
$
10,533

Business and corporate banking
5,781

 
1,825

 
1,461

 
1,304

 
1,160

 
973

 
12,504

Global banking
9,287

 
2,932

 
2,347

 
2,095

 
1,863

 
1,564

 
20,088

Other commercial
6,710

 
866

 
693

 
616

 
539

 
486

 
9,910

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgages
1,214

 
485

 
452

 
456

 
452

 
14,214

 
17,273

Home equity mortgages(1)
505

 
261

 
158

 
96

 
62

 
109

 
1,191

Credit cards(2)

 
721

 

 

 

 

 
721

Other consumer
149

 
162

 
14

 
8

 
4

 
6

 
343

Total
$
28,516

 
$
8,790

 
$
6,356

 
$
5,673

 
$
5,057

 
$
18,171

 
$
72,563

 
(1) 
Home equity mortgage maturities reflect estimates based on historical payment patterns.
(2) 
As credit card receivables do not have stated maturities, the table reflects estimates based on historical payment patterns.
Schedule of Receivables, Contractual Maturities, Repricing Characteristics
The following table summarizes contractual maturities of loans outstanding at December 31, 2017 due after one year by repricing characteristic:
December 31, 2017
After One But
Within Five Years
 
After Five Years
 
(in millions)
Receivables at predetermined interest rates
$
1,535

 
$
4,496

Receivables at floating or adjustable rates
24,341

 
13,675

Total
$
25,876

 
$
18,171

Summary of Nonaccrual Loans and Accruing Receivables 90 Days or More Delinquent
Nonaccrual loans, including nonaccrual loans held for sale, and accruing loans 90 days or more delinquent consisted of the following:
At December 31,
2017
 
2016
 
(in millions)
Nonaccrual loans:
 
 
 
Commercial:
 
 
 
Real estate, including construction
$
12

 
$
56

Business and corporate banking
215

 
187

Global banking
385

 
546

Other commercial
1

 
1

Commercial nonaccrual loans held for sale

 
11

Total commercial
613

 
801

Consumer:
 
 
 
Residential mortgages(1)(2)(3)
414

 
435

Home equity mortgages(1)(2)
67

 
75

Consumer nonaccrual loans held for sale
1

 
369

Total consumer
482

 
879

Total nonaccruing loans
1,095

 
1,680

Accruing loans contractually past due 90 days or more:
 
 
 
Commercial:
 
 
 
Business and corporate banking
1

 
1

Total commercial
1

 
1

Consumer:
 
 
 
Credit cards
9

 
10

Other consumer
8

 
7

Total consumer
17

 
17

Total accruing loans contractually past due 90 days or more
18

 
18

Total nonperforming loans
$
1,113

 
$
1,698

 
(1) 
At December 31, 2017 and 2016, nonaccrual consumer mortgage loans held for investment include $360 million and $382 million, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.
(2) 
Nonaccrual consumer mortgage loans held for investment include all loans which are 90 or more days contractually delinquent as well as loans discharged under Chapter 7 bankruptcy and not re-affirmed and second lien loans where the first lien loan that we own or service is 90 or more days contractually delinquent.
(3) 
Nonaccrual consumer mortgage loans for all periods does not include guaranteed loans purchased from the Government National Mortgage Association. Repayment of these loans are predominantly insured by the Federal Housing Administration and as such, these loans have different risk characteristics from the rest of our consumer loan portfolio.
Schedule of Additional Information on Nonaccrual Loans
The following table provides additional information on our nonaccrual loans:    
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Interest income that would have been recorded if the nonaccrual loans had been current in accordance with contractual terms during the period
68

 
91

 
85

Interest income that was recorded on nonaccrual loans and included in interest income during the period
24

 
22

 
22

Summary of Receivables which were Modified and as a Result Became Classified as TDR Loans
The following table presents information about loans which were modified during 2017, 2016 and 2015 as a result of this action became classified as TDR Loans:
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Commercial loans:
 
 
 
 
 
Real estate, including construction
$

 
$

 
$
4

Business and corporate banking
40

 
323

 
162

Global banking
160

 

 
67

Total commercial
200

 
323

 
233

Consumer loans:
 
 
 
 
 
Residential mortgages
34

 
62

 
168

Home equity mortgages
9

 
8

 
4

Credit cards
4

 
4

 
4

Total consumer
47

 
74

 
176

Total
$
247

 
$
397

 
$
409

Summary of TDR and Related Credit Loss Reserves for TDR Loans
The following table presents information about our TDR Loans and the related allowance for credit losses for TDR Loans:
 
December 31, 2017
 
December 31, 2016
 
Carrying Value
 
Unpaid Principal Balance
 
Carrying Value
 
Unpaid Principal Balance
 
(in millions)
TDR Loans:(1)(2)
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
Real estate, including construction
$

 
$

 
$
32

 
$
33

Business and corporate banking
194

 
266

 
300

 
363

Global banking
175

 
180

 
150

 
152

Total commercial(3)
369

 
446

 
482

 
548

Consumer loans:
 
 
 
 
 
 
 
Residential mortgages(4)
683

 
779

 
708

 
797

Home equity mortgages(4)
33

 
66

 
27

 
59

Credit cards
4

 
4

 
5

 
5

Total consumer
720

 
849

 
740

 
861

Total TDR Loans(5)
$
1,089

 
$
1,295

 
$
1,222

 
$
1,409

Allowance for credit losses for TDR Loans:(6)
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
Real estate, including construction
$

 
 
 
$

 
 
Business and corporate banking
12

 
 
 
37

 
 
Global banking
19

 
 
 

 
 
Total commercial
31

 
 
 
37

 
 
Consumer loans:
 
 
 
 
 
 
 
Residential mortgages
7

 
 
 
9

 
 
Home equity mortgages
1

 
 
 
1

 
 
Credit cards
1

 
 
 
1

 
 
Total consumer
9

 
 
 
11

 
 
Total allowance for credit losses for TDR Loans
$
40

 
 
 
$
48

 
 
 
(1) 
TDR Loans are considered to be impaired loans. For consumer loans, all such loans are considered impaired loans regardless of accrual status. For commercial loans, impaired loans include other loans in addition to TDR Loans which totaled $329 million and $571 million at December 31, 2017 and 2016, respectively.
(2) 
The carrying value of TDR Loans includes basis adjustments on the loans, such as unearned income, unamortized deferred fees and costs on originated loans, partial charge-offs and premiums or discounts on purchased loans.
(3) 
Additional commitments to lend to commercial borrowers whose loans have been modified in TDR Loans totaled $245 million and $184 million at December 31, 2017 and 2016, respectively.
(4) 
At December 31, 2017 and 2016, the carrying value of consumer mortgage TDR Loans held for investment includes $655 million and $672 million, respectively, of loans that are recorded at the lower of amortized cost or fair value of the collateral less cost to sell.
(5) 
At December 31, 2017 and 2016, the carrying value of TDR Loans includes $559 million and $645 million, respectively, of loans which are classified as nonaccrual.
(6) 
Included in the allowance for credit losses.
Trouble Debt Restructuring Additional Information
The following table presents information about average TDR Loans and interest income recognized on TDR Loans:
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Average balance of TDR Loans:
 
 
 
 
 
Commercial loans:
 
 
 
 
 
Real estate, including construction
$
19

 
$
69

 
$
136

Business and corporate banking
246

 
292

 
76

Global banking
154

 
121

 
44

Total commercial
419

 
482

 
256

Consumer loans:
 
 
 
 
 
Residential mortgages
704

 
740

 
1,017

Home equity mortgages
31

 
25

 
21

Credit cards
4

 
5

 
6

Total consumer
739

 
770

 
1,044

Total average balance of TDR Loans
$
1,158

 
$
1,252

 
$
1,300

Interest income recognized on TDR Loans:
 
 
 
 
 
Commercial loans:
 
 
 
 
 
Real estate, including construction
$

 
$
4

 
$
4

Business and corporate banking
7

 
8

 
3

Global banking
2

 
1

 

Total commercial
9

 
13

 
7

Consumer loans:
 
 
 
 
 
Residential mortgages
28

 
25

 
37

Home equity mortgages
2

 
1

 
1

Total consumer
30

 
26

 
38

Total interest income recognized on TDR Loans
$
39

 
$
39

 
$
45

Loans Classified as TDR Loans
The following table presents consumer loans which were classified as TDR Loans during the previous 12 months which subsequently became 60 days or greater contractually delinquent during the years ended December 31, 2017 and 2016 and 2015:
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Consumer loans:
 
 
 
 
 
Residential mortgages
$
9

 
$
24

 
$
36

Home equity mortgages
2

 

 
1

Total consumer
$
11

 
$
24

 
37

Impaired Commercial Loans Considered as TDR Loans
  The following table presents information about impaired commercial loans and the related impairment reserve for impaired commercial loans:
 
Amount 
with
Impairment
Reserves(1)
 
Amount
without
Impairment
Reserves(1)
 
Total Impaired
Commercial
Loans(1)(2)
 
Impairment
Reserve
 
Unpaid Principal Balance
 
(in millions)
At December 31, 2017
 
 
 
 
 
 
 
 
 
Real estate, including construction
$

 
$
11

 
$
11

 
$

 
$
11

Business and corporate banking
121

 
129

 
250

 
45

 
311

Global banking
262

 
175

 
437

 
82

 
520

Other commercial

 

 

 

 

Total commercial
$
383

 
$
315

 
$
698

 
$
127

 
$
842

At December 31, 2016
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
2

 
$
41

 
$
43

 
$
1

 
$
45

Business and corporate banking
176

 
166

 
342

 
55

 
397

Global banking
417

 
244

 
661

 
251

 
674

Other commercial
1

 
6

 
7

 
1

 
7

Total commercial
$
596

 
$
457

 
$
1,053

 
$
308

 
$
1,123

 
(1) 
Reflects the carrying value of impaired commercial loans and includes basis adjustments on the loans, such as partial charge-offs, unamortized deferred fees and costs on originated loans and any premiums or discounts on purchased loans.
(2) 
Includes impaired commercial loans that are also considered TDR Loans which totaled $369 million and $482 million at December 31, 2017 and 2016, respectively.
Average Balance and Interest Income Recognized on Impaired Commercial Loans
The following table presents information about average impaired commercial loans and interest income recognized on impaired commercial loans:
Year Ended December 31,
2017
 
2016
 
2015
 
(in millions)
Average balance of impaired commercial loans:
 
 
 
 
 
Real estate, including construction
$
32

 
$
83

 
$
151

Business and corporate banking
304

 
344

 
125

Global banking
554

 
487

 
44

Other commercial
4

 
7

 
7

Total average balance of impaired commercial loans
$
894

 
$
921

 
$
327

Interest income recognized on impaired commercial loans:
 
 
 
 
 
Real estate, including construction
$

 
$
4

 
$
4

Business and corporate banking
9

 
9

 
4

Global banking
2

 

 

Total interest income recognized on impaired commercial loans
$
11

 
$
13

 
$
8

Summary of Criticized Assets for Commercial Loans
The following table summarizes criticized commercial loans:
 
Special Mention
 
Substandard
 
Doubtful
 
Total
 
(in millions)
At December 31, 2017
 
 
 
 
 
 
 
Real estate, including construction
$
467

 
$
117

 
$
1

 
$
585

Business and corporate banking
477

 
519

 
44

 
1,040

Global banking
452

 
1,612

 
82

 
2,146

Other commercial
11

 

 

 
11

Total commercial
$
1,407

 
$
2,248

 
$
127

 
$
3,782

At December 31, 2016
 
 
 
 
 
 
 
Real estate, including construction
$
445

 
$
152

 
$
1

 
$
598

Business and corporate banking
597

 
803

 
58

 
1,458

Global banking
899

 
2,478

 
298

 
3,675

Other commercial

 
6

 
1

 
7

Total commercial
$
1,941

 
$
3,439

 
$
358

 
$
5,738

Status of Commercial Loan Portfolio
  The following table summarizes the status of our commercial loan portfolio, excluding loans held for sale:
 
Performing
Loans
 
Nonaccrual
Loans
 
Accruing Loans
Contractually Past
Due 90 days or More
 
Total
 
(in millions)
At December 31, 2017
 
 
 
 
 
 
 
Real estate, including construction
$
10,521

 
$
12

 
$

 
$
10,533

Business and corporate banking
12,288

 
215

 
1

 
12,504

Global banking
19,703

 
385

 

 
20,088

Other commercial
9,909

 
1

 

 
9,910

Total commercial
$
52,421

 
$
613

 
$
1

 
$
53,035

At December 31, 2016
 
 
 
 
 
 
 
Real estate, including construction
$
10,834

 
$
56

 
$

 
$
10,890

Business and corporate banking
13,892

 
187

 
1

 
14,080

Global banking
22,935

 
546

 

 
23,481

Other commercial
5,764

 
1

 

 
5,765

Total commercial
$
53,425

 
$
790

 
$
1

 
$
54,216

Credit Risk Profile of Commercial Loan
  The following table shows the credit risk profile of our commercial loan portfolio:
 
Investment
Grade(1)
 
Non-Investment
Grade
 
Total
 
(in millions)
At December 31, 2017
 
 
 
 
 
Real estate, including construction
$
7,456

 
$
3,077

 
$
10,533

Business and corporate banking
5,752

 
6,752

 
12,504

Global banking
13,218

 
6,870

 
20,088

Other commercial
8,341

 
1,569

 
9,910

Total commercial
$
34,767

 
$
18,268

 
$
53,035

At December 31, 2016
 
 
 
 
 
Real estate, including construction
$
7,857

 
$
3,033

 
$
10,890

Business and corporate banking
6,348

 
7,732

 
14,080

Global banking
14,205

 
9,276

 
23,481

Other commercial
4,473

 
1,292

 
5,765

Total commercial
$
32,883

 
$
21,333

 
$
54,216

 
(1) 
Investment grade includes commercial loans with credit ratings of at least BBB- or above or the equivalent based on our internal credit rating system.
Delinquency Ratio for Consumer Loan
  The following table summarizes dollars of two-months-and-over contractual delinquency and as a percent of total loans and loans held for sale ("delinquency ratio") for our consumer loan portfolio:
 
December 31, 2017
 
December 31, 2016
  
Delinquent Loans
 
Delinquency
Ratio
 
Delinquent Loans
 
Delinquency
Ratio
 
(dollars are in millions)
Residential mortgages(1)(2)
$
425

 
2.46
%
 
$
765

 
4.23
%
Home equity mortgages(1)(2)
39

 
3.27

 
46

 
3.26

Credit cards
12

 
1.66

 
14

 
2.03

Other consumer
10

 
2.48

 
11

 
2.43

Total consumer
$
486

 
2.48
%
 
$
836

 
4.05
%
 
(1) 
At December 31, 2017 and 2016, consumer mortgage loan delinquency includes $342 million and $711 million, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell, including $1 million and $358 million, respectively, relating to loans held for sale.
(2) 
At December 31, 2017 and 2016, consumer mortgage loans and loans held for sale include $159 million and $474 million, respectively, of loans that were in the process of foreclosure.
Status of Consumer Loan Portfolio
  The following table summarizes the status of our consumer loan portfolio, excluding loans held for sale:
 
Performing
Loans
 
Nonaccrual
Loans
 
Accruing Loans
Contractually Past
Due 90 days or More
 
Total
 
(in millions)
At December 31, 2017
 
 
 
 
 
 
 
Residential mortgages
$
16,859

 
$
414

 
$

 
$
17,273

Home equity mortgages
1,124

 
67

 

 
1,191

Credit cards
712

 

 
9

 
721

Other consumer
335

 

 
8

 
343

Total consumer
$
19,030

 
$
481

 
$
17

 
$
19,528

At December 31, 2016
 
 
 
 
 
 
 
Residential mortgages
$
16,746

 
$
435

 
$

 
$
17,181

Home equity mortgages
1,333

 
75

 

 
1,408

Credit cards
678

 

 
10

 
688

Other consumer
375

 

 
7

 
382

Total consumer
$
19,132

 
$
510

 
$
17

 
$
19,659