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Loans (Tables)
12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Components of Loans
Loans consisted of the following:
At December 31,
2019
 
2018
 
(in millions)
Commercial loans:
 
 
 
Real estate, including construction
$
11,501

 
$
11,344

Business and corporate banking
13,479

 
13,066

Global banking(1)
17,915

 
20,167

Other commercial:
 
 
 
Affiliates(2)
2,343

 
2,274

Other
2,973

 
2,491

Total other commercial
5,316

 
4,765

Total commercial
48,211

 
49,342

Consumer loans:
 
 
 
Residential mortgages
17,801

 
17,383

Home equity mortgages
853

 
982

Credit cards
1,405

 
1,019

Other consumer
283

 
252

Total consumer
20,342

 
19,636

Total loans
$
68,553

 
$
68,978

 
(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) 
See Note 23, "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 at December 31, 2019 and 2018. 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, 2019
30 - 89 Days
 
90+ Days
 
 
Current(1)
 
Total Loans
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
7

 
$
1

 
$
8

 
$
11,493

 
$
11,501

Business and corporate banking
60

 
35

 
95

 
13,384

 
13,479

Global banking

 

 

 
17,915

 
17,915

Other commercial
22

 

 
22

 
5,294

 
5,316

Total commercial
89

 
36

 
125

 
48,086

 
48,211

Consumer loans:
 
 
 
 
 
 
 
 
 
Residential mortgages
342

 
272

 
614

 
17,187

 
17,801

Home equity mortgages
10

 
24

 
34

 
819

 
853

Credit cards
24

 
24

 
48

 
1,357

 
1,405

Other consumer
5

 
5

 
10

 
273

 
283

Total consumer
381

 
325

 
706

 
19,636

 
20,342

Total loans
$
470

 
$
361

 
$
831

 
$
67,722

 
$
68,553

 
Past Due
 
Total Past Due 30 Days or More
 
 
 
 
At December 31, 2018
30 - 89 Days
 
90+ Days
 
 
Current(1)
 
Total Loans
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
76

 
$
3

 
$
79

 
$
11,265

 
$
11,344

Business and corporate banking
79

 
38

 
117

 
12,949

 
13,066

Global banking

 

 

 
20,167

 
20,167

Other commercial
15

 

 
15

 
4,750

 
4,765

Total commercial
170

 
41

 
211

 
49,131

 
49,342

Consumer loans:
 
 
 
 
 
 
 
 
 
Residential mortgages
469

 
254

 
723

 
16,660

 
17,383

Home equity mortgages
14

 
27

 
41

 
941

 
982

Credit cards
13

 
14

 
27

 
992

 
1,019

Other consumer
5

 
5

 
10

 
242

 
252

Total consumer
501

 
300

 
801

 
18,835

 
19,636

Total loans
$
671

 
$
341

 
$
1,012

 
$
67,966

 
$
68,978


 
(1) 
Loans less than 30 days past due are presented as current.
Contractual Maturities of Loans Outstanding
Contractual maturities of loans outstanding at December 31, 2019 were as follows:
  
2020
 
2021
 
2022
 
2023
 
2024
 
Thereafter
 
Total
 
(in millions)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
4,517

 
$
1,676

 
$
1,712

 
$
1,609

 
$
1,515

 
$
472

 
$
11,501

Business and corporate banking
5,293

 
1,964

 
2,006

 
1,885

 
1,775

 
556

 
13,479

Global banking
7,157

 
2,610

 
2,667

 
2,506

 
2,238

 
737

 
17,915

Other commercial
2,088

 
775

 
791

 
744

 
700

 
218

 
5,316

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgages
393

 
504

 
501

 
509

 
518

 
15,376

 
17,801

Home equity mortgages(1)
356

 
189

 
114

 
70

 
45

 
79

 
853

Credit cards(2)

 
1,405

 

 

 

 

 
1,405

Other consumer
110

 
133

 
16

 
9

 
6

 
9

 
283

Total
$
19,914

 
$
9,256

 
$
7,807

 
$
7,332

 
$
6,797

 
$
17,447

 
$
68,553

 
(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 an average estimate based on historical payment patterns.
Contractual Maturities of Loans Outstanding by Repricing Characteristic
The following table summarizes contractual maturities of loans outstanding at December 31, 2019 due after one year by repricing characteristic:
December 31, 2019
After One But
Within Five Years
 
After Five Years
 
(in millions)
Receivables at predetermined interest rates
$
1,733

 
$
4,929

Receivables at floating or adjustable rates
29,459

 
12,518

Total
$
31,192

 
$
17,447

Summary of Nonaccrual Loans and Accruing Receivables 90 Days or More Delinquent
Nonperforming loans, including nonaccrual loans and accruing loans 90 days or more delinquent, consisted of the following:
At December 31,
2019
 
2018
 
(in millions)
Nonaccrual loans:
 
 
 
Commercial:
 
 
 
Real estate, including construction
$
6

 
$
7

Business and corporate banking
82

 
70

Global banking
149

 
65

Other commercial

 
1

Total commercial
237

 
143

Consumer:
 
 
 
Residential mortgages(1)(2)(3)
381

 
341

Home equity mortgages(1)(2)
46

 
55

Total consumer
427

 
396

Total nonaccruing loans
664

 
539

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

 
1

Total commercial
1

 
1

Consumer:
 
 
 
Credit cards
24

 
14

Other consumer
5

 
6

Total consumer
29

 
20

Total accruing loans contractually past due 90 days or more
30

 
21

Total nonperforming loans
$
694

 
$
560

 
(1) 
At both December 31, 2019 and 2018, nonaccrual consumer mortgage loans include $289 million 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 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 is 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,
2019
 
2018
 
2017
 
(in millions)
Interest income that would have been recorded if the nonaccrual loans had been current in accordance with contractual terms during the period
$
35

 
$
46

 
$
68

Interest income that was recorded on nonaccrual loans and included in interest income during the period
15

 
31

 
24

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 2019, 2018 and 2017 and as a result of this action became classified as TDR Loans:
Year Ended December 31,
2019
 
2018
 
2017
 
(in millions)
Commercial loans:
 
 
 
 
 
Business and corporate banking
$

 
$
6

 
$
40

Global banking

 

 
160

Total commercial

 
6

 
200

Consumer loans:
 
 
 
 
 
Residential mortgages
8

 
26

 
34

Home equity mortgages
1

 
5

 
9

Credit cards
3

 
4

 
4

Total consumer
12

 
35

 
47

Total
$
12

 
$
41

 
$
247

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, 2019
 
December 31, 2018
 
Carrying Value
 
Unpaid Principal Balance
 
Carrying Value
 
Unpaid Principal Balance
 
(in millions)
TDR Loans:(1)(2)
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
Business and corporate banking
$
36

 
$
61

 
$
68

 
$
86

Global banking
68

 
78

 
113

 
119

Total commercial(3)
104

 
139

 
181

 
205

Consumer loans:
 
 
 
 
 
 
 
Residential mortgages(4)
580

 
663

 
640

 
730

Home equity mortgages(4)
32

 
60

 
35

 
65

Credit cards
4

 
4

 
3

 
4

Total consumer
616

 
727

 
678

 
799

Total TDR Loans(5)
$
720

 
$
866

 
$
859

 
$
1,004

Allowance for credit losses for TDR Loans:(6)
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
Business and corporate banking
$
1

 
 
 
$
12

 
 
Global banking

 
 
 

 
 
Total commercial
1

 
 
 
12

 
 
Consumer loans:
 
 
 
 
 
 
 
Residential mortgages
4

 
 
 
3

 
 
Home equity mortgages
1

 
 
 
1

 
 
Credit cards
1

 
 
 
1

 
 
Total consumer
6

 
 
 
5

 
 
Total allowance for credit losses for TDR Loans
$
7

 
 
 
$
17

 
 
 
(1) 
TDR Loans are considered to be impaired loans. For commercial loans, impaired loans include other loans in addition to TDR Loans which totaled $164 million and $54 million at December 31, 2019 and 2018, respectively.
(2) 
The carrying value of TDR Loans includes basis adjustments on the loans, such as partial charge-offs.
(3) 
Additional commitments to lend to commercial borrowers whose loans have been modified in TDR Loans totaled $222 million and $151 million at December 31, 2019 and 2018, respectively.
(4) 
At December 31, 2019 and 2018, the carrying value of consumer mortgage TDR Loans includes $557 million and $615 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, 2019 and 2018, the carrying value of TDR Loans includes $230 million and $286 million, respectively, of loans which are classified as nonaccrual.
(6) 
Included in the allowance for credit losses.
Troubled Debt Restructuring Additional Information
The following table presents information about average TDR Loans and interest income recognized on TDR Loans:
Year Ended December 31,
2019
 
2018
 
2017
 
(in millions)
Average balance of TDR Loans:
 
 
 
 
 
Commercial loans:
 
 
 
 
 
Real estate, including construction
$

 
$

 
$
19

Business and corporate banking
55

 
122

 
246

Global banking
81

 
124

 
154

Total commercial
136

 
246

 
419

Consumer loans:
 
 
 
 
 
Residential mortgages
608

 
660

 
704

Home equity mortgages
33

 
35

 
31

Credit cards
4

 
4

 
4

Total consumer
645

 
699

 
739

Total average balance of TDR Loans
$
781

 
$
945

 
$
1,158

Interest income recognized on TDR Loans:
 
 
 
 
 
Commercial loans:
 
 
 
 
 
Business and corporate banking
$
2

 
$
12

 
$
7

Global banking
2

 
3

 
2

Total commercial
4

 
15

 
9

Consumer loans:
 
 
 
 
 
Residential mortgages
26

 
27

 
28

Home equity mortgages
2

 
2

 
2

Total consumer
28

 
29

 
30

Total interest income recognized on TDR Loans
$
32

 
$
44

 
$
39

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, 2019, 2018 and 2017:
Year Ended December 31,
2019
 
2018
 
2017
 
(in millions)
Consumer loans:
 
 
 
 
 
Residential mortgages
$
3

 
$
8

 
$
9

Home equity mortgages

 
2

 
2

Total consumer
$
3

 
$
10

 
$
11

Impaired Commercial Loans Considered as TDR Loans
  The following table presents information about impaired commercial loans and the related impairment reserve:
 
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, 2019
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
2

 
$
3

 
$
5

 
$

 
$
5

Business and corporate banking
57

 
33

 
90

 
23

 
109

Global banking
32

 
141

 
173

 
15

 
183

Total commercial
$
91

 
$
177

 
$
268

 
$
38

 
$
297

At December 31, 2018
 
 
 
 
 
 
 
 
 
Real estate, including construction
$
3

 
$
3

 
$
6

 
$
1

 
$
6

Business and corporate banking
58

 
37

 
95

 
18

 
109

Global banking

 
133

 
133

 

 
140

Other commercial

 
1

 
1

 

 
1

Total commercial
$
61

 
$
174

 
$
235

 
$
19

 
$
256

 
(1) 
Reflects the carrying value of impaired commercial loans and includes basis adjustments on the loans, such as partial charge-offs.
(2) 
Includes impaired commercial loans that are also considered TDR Loans which totaled $104 million and $181 million at December 31, 2019 and 2018, 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,
2019
 
2018
 
2017
 
(in millions)
Average balance of impaired commercial loans:
 
 
 
 
 
Real estate, including construction
$
5

 
$
9

 
$
32

Business and corporate banking
111

 
200

 
304

Global banking
127

 
239

 
554

Other commercial

 

 
4

Total average balance of impaired commercial loans
$
243

 
$
448

 
$
894

Interest income recognized on impaired commercial loans:
 
 
 
 
 
Business and corporate banking
$
4

 
$
15

 
$
9

Global banking
3

 
7

 
2

Total interest income recognized on impaired commercial loans
$
7

 
$
22

 
$
11

Summary of Criticized Assets for Commercial Loans
The following table summarizes criticized commercial loans:
 
Special Mention
 
Substandard
 
Doubtful
 
Total
 
(in millions)
At December 31, 2019
 
 
 
 
 
 
 
Real estate, including construction
$
516

 
$
203

 
$

 
$
719

Business and corporate banking
467

 
386

 
23

 
876

Global banking
184

 
196

 
15

 
395

Other commercial
11

 

 

 
11

Total commercial
$
1,178

 
$
785

 
$
38

 
$
2,001

At December 31, 2018
 
 
 
 
 
 
 
Real estate, including construction
$
452

 
$
93

 
$
4

 
$
549

Business and corporate banking
193

 
314

 
15

 
522

Global banking
262

 
277

 

 
539

Other commercial

 
1

 

 
1

Total commercial
$
907

 
$
685

 
$
19

 
$
1,611

Status of Commercial Loan Portfolio
  The following table summarizes the status of our commercial loan portfolio:
 
Performing
Loans
 
Nonaccrual
Loans
 
Accruing Loans
Contractually Past
Due 90 days or More
 
Total
 
(in millions)
At December 31, 2019
 
 
 
 
 
 
 
Real estate, including construction
$
11,495

 
$
6

 
$

 
$
11,501

Business and corporate banking
13,396

 
82

 
1

 
13,479

Global banking
17,766

 
149

 

 
17,915

Other commercial
5,316

 

 

 
5,316

Total commercial
$
47,973

 
$
237

 
$
1

 
$
48,211

At December 31, 2018
 
 
 
 
 
 
 
Real estate, including construction
$
11,337

 
$
7

 
$

 
$
11,344

Business and corporate banking
12,995

 
70

 
1

 
13,066

Global banking
20,102

 
65

 

 
20,167

Other commercial
4,764

 
1

 

 
4,765

Total commercial
$
49,198

 
$
143

 
$
1

 
$
49,342

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, 2019
 
 
 
 
 
Real estate, including construction
$
6,332

 
$
5,169

 
$
11,501

Business and corporate banking
6,029

 
7,450

 
13,479

Global banking
12,981

 
4,934

 
17,915

Other commercial
4,649

 
667

 
5,316

Total commercial
$
29,991

 
$
18,220

 
$
48,211

At December 31, 2018
 
 
 
 
 
Real estate, including construction
$
6,769

 
$
4,575

 
$
11,344

Business and corporate banking
5,674

 
7,392

 
13,066

Global banking
14,764

 
5,403

 
20,167

Other commercial
3,990

 
775

 
4,765

Total commercial
$
31,197

 
$
18,145

 
$
49,342

 
(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 ("delinquency ratio") for our consumer loan portfolio:
 
December 31, 2019
 
December 31, 2018
  
Delinquent Loans
 
Delinquency
Ratio
 
Delinquent Loans
 
Delinquency
Ratio
 
(dollars are in millions)
Residential mortgages(1)(2)
$
350

 
1.96
%
 
$
347

 
1.99
%
Home equity mortgages(1)(2)
25

 
2.93

 
30

 
3.05

Credit cards
34

 
2.42

 
20

 
1.96

Other consumer
7

 
2.47

 
8

 
2.62

Total consumer
$
416

 
2.04
%
 
$
405

 
2.05
%
 
(1) 
At December 31, 2019 and 2018, consumer mortgage loan delinquency includes $256 million and $254 million, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.
(2) 
At December 31, 2019 and 2018, consumer mortgage loans include $142 million and $125 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:
 
Performing
Loans
 
Nonaccrual
Loans
 
Accruing Loans
Contractually Past
Due 90 days or More
 
Total
 
(in millions)
At December 31, 2019
 
 
 
 
 
 
 
Residential mortgages
$
17,420

 
$
381

 
$

 
$
17,801

Home equity mortgages
807

 
46

 

 
853

Credit cards
1,381

 

 
24

 
1,405

Other consumer
278

 

 
5

 
283

Total consumer
$
19,886

 
$
427

 
$
29

 
$
20,342

At December 31, 2018
 
 
 
 
 
 
 
Residential mortgages
$
17,042

 
$
341

 
$

 
$
17,383

Home equity mortgages
927

 
55

 

 
982

Credit cards
1,005

 

 
14

 
1,019

Other consumer
246

 

 
6

 
252

Total consumer
$
19,220

 
$
396

 
$
20

 
$
19,636