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Related Party Transactions (Tables)
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Summary of Related Party Transactions
The following tables and discussions below present the more significant related party balances and the income (expense) generated by related party transactions:
At December 31,
2018
 
2017
 
(in millions)
Assets:
 
 
 
Cash and due from banks
$
245

 
$
191

Interest bearing deposits with banks
1,000

 
473

Securities purchased under agreements to resell(1)

 
1,115

Trading assets
102

 
63

Loans
2,274

 
6,750

Other(2)
169

 
134

Total assets
$
3,790

 
$
8,726

Liabilities:
 
 
 
Deposits
$
12,000

 
$
10,521

Trading liabilities
349

 
737

Short-term borrowings
638

 
1,595

Long-term debt
7,845

 
4,841

Other(2)
333

 
387

Total liabilities
$
21,165

 
$
18,081

 
(1) 
Reflects purchases of securities which other HSBC affiliates have agreed to repurchase.
(2) 
Other assets and other liabilities primarily consist of derivative balances associated with hedging activities and other miscellaneous account receivables and payables.
Year Ended December 31,
2018
 
2017
 
2016
 
(in millions)
Income (Expense):
 
 
 
 
 
Interest income
$
107

 
$
65

 
$
122

Interest expense
(367
)
 
(267
)
 
(166
)
Net interest expense
(260
)
 
(202
)
 
(44
)
Trading revenue (expense)
1,370

 
(615
)
 
(1,297
)
Servicing and other fees from HSBC affiliates:
 
 
 
 
 
HSBC Bank plc
176

 
154

 
156

HSBC Markets (USA) Inc. ("HMUS")
112

 
71

 
34

HSBC Finance
3

 
44

 
40

Other HSBC affiliates
65

 
79

 
59

Total servicing and other fees from HSBC affiliates
356

 
348

 
289

Gain (loss) on instruments designated at fair value and related derivatives
(1,052
)
 
1,108

 
467

Support services from HSBC affiliates:
 
 
 
 
 
HSBC Technology & Services (USA) ("HTSU")
(1,198
)
 
(1,165
)
 
(1,027
)
HMUS
(105
)
 
(121
)
 
(214
)
Other HSBC affiliates
(300
)
 
(263
)
 
(254
)
Total support services from HSBC affiliates
(1,603
)
 
(1,549
)
 
(1,495
)
Rental income from HSBC affiliates, net(1)
48

 
54

 
60

Stock based compensation expense(2)
(25
)
 
(31
)
 
(39
)

 

(1) 
We receive rental income from our affiliates, and in some cases pay rental expense to our affiliates, for rent on certain office space. Net rental income from our affiliates is recorded as a component of occupancy expense, net in our consolidated statement of income (loss).
(2) 
Employees may participate in one or more stock compensation plans sponsored by HSBC. These expenses are included in salaries and employee benefits in our consolidated statement of income (loss). Certain employees are also eligible to participate in a defined benefit pension plan and other postretirement plans sponsored by HSBC North America which are discussed in Note 20, "Pension and Other Postretirement Benefits."
Schedule of Assets by Related Party
At December 31, 2018 and 2017, we had the following loan balances outstanding with HSBC affiliates:
At December 31,
2018
 
2017
 
(in millions)
HMUS and subsidiaries
$
2,235

 
$
6,690

Other short-term affiliate lending
39

 
60

Total loans
$
2,274

 
$
6,750