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Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Summary of Changes in the Allowance for Credit Losses and the Related Loan Balance by Product
The following table summarizes the changes in the allowance for credit losses by product and the related loan balance by product during the years ended December 31, 2017, 2016 and 2015:
 
Commercial
 
Consumer
 
 
 
Real Estate, including Construction
 
Business
and Corporate Banking
 
Global
Banking
 
Other
Comm'l
 
Residential
Mortgages
 
Home
Equity
Mortgages
 
Credit
Cards
 
Other
Consumer
 
Total
 
(in millions)
Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses – beginning of period
$
92

 
$
317

 
$
508

 
$
13

 
$
26

 
$
20

 
$
34

 
$
7

 
$
1,017

Provision charged (credited) to income
(3
)
 
(59
)
 
(116
)
 
6

 
(7
)
 
(8
)
 
22

 
—

 
(165
)
Charge-offs
(7
)
 
(37
)
 
(141
)
 
(1
)
 
(4
)
 
(6
)
 
(30
)
 
(4
)
 
(230
)
Recoveries
—

 
23

 
13

 
—

 
10

 
5

 
6

 
2

 
59

Net (charge-offs) recoveries
(7
)
 
(14
)
 
(128
)
 
(1
)
 
6

 
(1
)
 
(24
)
 
(2
)
 
(171
)
Allowance for credit losses – end of period
$
82

 
$
244

 
$
264

 
$
18

 
$
25

 
$
11

 
$
32

 
$
5

 
$
681

Ending balance: collectively evaluated for impairment
$
82

 
$
199

 
$
182

 
$
18

 
$
18

 
$
10

 
$
31

 
$
5

 
$
545

Ending balance: individually evaluated for impairment
—

 
45

 
82

 
—

 
7

 
1

 
1

 
—

 
136

Total allowance for credit losses
$
82

 
$
244

 
$
264

 
$
18

 
$
25

 
$
11

 
$
32

 
$
5

 
$
681

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment(1)
$
10,522

 
$
12,254

 
$
19,651

 
$
9,910

 
$
16,308

 
$
1,121

 
$
717

 
$
343

 
$
70,826

Individually evaluated for impairment(2)
11

 
250

 
437

 
—

 
57

 
4

 
4

 
—

 
763

Loans carried at lower of amortized cost or fair value less cost to sell
—

 
—

 
—

 
—

 
908

 
66

 
—

 
—

 
974

Total loans
$
10,533

 
$
12,504

 
$
20,088

 
$
9,910

 
$
17,273

 
$
1,191

 
$
721

 
$
343

 
$
72,563

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses – beginning of period
$
86

 
$
407

 
$
267

 
$
19

 
$
68

 
$
24

 
$
32

 
$
9

 
$
912

Provision charged (credited) to income(3)
—

 
10

 
348

 
(6
)
 
(9
)
 
(1
)
 
26

 
4

 
372

Charge-offs(3)(4)
(1
)
 
(110
)
 
(107
)
 
—

 
(45
)
 
(8
)
 
(30
)
 
(8
)
 
(309
)
Recoveries
7

 
10

 
—

 
—

 
12

 
5

 
6

 
2

 
42

Net (charge-offs) recoveries
6

 
(100
)
 
(107
)
 
—

 
(33
)
 
(3
)
 
(24
)
 
(6
)
 
(267
)
Allowance for credit losses – end of period
$
92

 
$
317

 
$
508

 
$
13

 
$
26

 
$
20

 
$
34

 
$
7

 
$
1,017

Ending balance: collectively evaluated for impairment
$
91

 
$
262

 
$
257

 
$
12

 
$
17

 
$
19

 
$
33

 
$
7

 
$
698

Ending balance: individually evaluated for impairment
1

 
55

 
251

 
1

 
9

 
1

 
1

 
—

 
319

Total allowance for credit losses
$
92

 
$
317

 
$
508

 
$
13

 
$
26

 
$
20

 
$
34

 
$
7

 
$
1,017

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment(1)
$
10,847

 
$
13,738

 
$
22,820

 
$
5,758

 
$
16,165

 
$
1,335

 
$
683

 
$
382

 
$
71,728

Individually evaluated for impairment(2)
43

 
342

 
661

 
7

 
60

 
3

 
5

 
—

 
1,121

Loans carried at lower of amortized cost or fair value less cost to sell
—

 
—

 
—

 
—

 
956

 
70

 
—

 
—

 
1,026

Total loans
$
10,890

 
$
14,080

 
$
23,481

 
$
5,765

 
$
17,181

 
$
1,408

 
$
688

 
$
382

 
$
73,875

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
Consumer
 
 
 
Real Estate, including Construction
 
Business
and Corporate Banking
 
Global
Banking
 
Other
Comm'l
 
Residential
Mortgages
 
Home
Equity
Mortgages
 
Credit
Cards
 
Other
Consumer
 
Total
 
(in millions)
Year Ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses – beginning of period
$
89

 
$
251

 
$
131

 
$
21

 
$
107

 
$
32

 
$
39

 
$
10

 
$
680

Provision charged (credited) to income
2

 
215

 
136

 
(2
)
 
(15
)
 
(4
)
 
20

 
9

 
361

Charge-offs
(10
)
 
(69
)
 
—

 
(1
)
 
(35
)
 
(8
)
 
(32
)
 
(12
)
 
(167
)
Recoveries
5

 
10

 
—

 
1

 
11

 
4

 
5

 
2

 
38

Net (charge-offs) recoveries
(5
)
 
(59
)
 
—

 
—

 
(24
)
 
(4
)
 
(27
)
 
(10
)
 
$
(129
)
Allowance for credit losses – end of period
$
86

 
$
407

 
$
267

 
$
19

 
$
68

 
$
24

 
$
32

 
$
9

 
$
912

Ending balance: collectively evaluated for impairment
$
85

 
$
355

 
$
267

 
$
18

 
$
35

 
$
23

 
$
31

 
$
9

 
$
823

Ending balance: individually evaluated for impairment
1

 
52

 
—

 
1

 
33

 
1

 
1

 
—

 
89

Total allowance for credit losses
$
86

 
$
407

 
$
267

 
$
19

 
$
68

 
$
24

 
$
32

 
$
9

 
$
912

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment(1)
$
9,890

 
$
14,148

 
$
29,786

 
$
8,176

 
$
16,112

 
$
1,523

 
$
694

 
$
407

 
$
80,736

Individually evaluated for impairment(2)
110

 
217

 
119

 
7

 
197

 
5

 
5

 
—

 
660

Loans carried at lower of amortized cost or fair value less cost to sell
—

 
—

 
—

 
—

 
1,449

 
72

 
—

 
—

 
1,521

Total loans
$
10,000

 
$
14,365

 
$
29,905

 
$
8,183

 
$
17,758

 
$
1,600

 
$
699

 
$
407

 
$
82,917

 

(1) 
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 totaling $6,750 million, $3,274 million and $4,815 million at December 31, 2017, 2016 and 2015, respectively, for which we do not carry an associated allowance for credit losses.
(2) 
For consumer loans and certain small business loans, these amounts represent TDR Loans for which we evaluate reserves using a discounted cash flow methodology. Each loan is individually identified as a TDR Loan and then grouped together with other TDR Loans with similar characteristics. The discounted cash flow analysis is then applied to these groups of TDR Loans. Loans individually evaluated for impairment exclude TDR Loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $655 million, $672 million and $881 million at December 31, 2017, 2016 and 2015, respectively.
(3) 
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.
(4) 
For collateral dependent loans that are transferred to held for sale, the existing allowance for credit losses at the time of transfer are recognized as a charge-off. We transferred to held for sale certain residential mortgage loans during 2016 and, accordingly, we recognized the existing allowance for credit losses on these loans as additional charge-offs totaling $22 million during 2016.