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Business Segments
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Business Segments Business Segments
We have four distinct business segments that we utilize for management reporting and analysis purposes, which are aligned with HSBC's global business strategy: Wealth and Personal Banking ("WPB") which was created in 2020 and is discussed further below, Commercial Banking ("CMB"), Global Banking and Markets ("GBM") and a Corporate Center ("CC").
We previously announced as part of our Restructuring Plan that we combined our Retail Banking and Wealth Management ("RBWM") and Private Banking ("PB") businesses to create a single WPB business. During the second quarter of 2020, we implemented a change to our internal management reporting to report what was historically RBWM and PB together within the newly created WPB segment and, as a result, we have aligned our segment reporting to reflect this change for all periods presented.
During the second quarter of 2020, we also implemented a change to our internal management reporting to allocate Markets Treasury, which was historically reported within the CC segment, to the WPB, CMB and GBM businesses to better align the revenue and expense to the businesses generating or utilizing this activity. As a result, we have aligned our segment reporting to reflect this change for all periods presented.
The following tables summarize the impact of these changes on reported segment profit (loss) before tax, total assets and total deposits as of and for the three months ended March 31, 2020:
As Previously ReportedAfter Reporting Changes
(in millions)
Segment profit (loss) before tax during the three months ended March 31, 2020:
RBWM$(546)NR
WPBNR$(869)
CMB(3)(2)
GBM43 45 
PB(323)NR
CC(169)(172)
Segment total assets at March 31, 2020:
RBWM$18,954 NR
WPBNR$58,246 
CMB31,540 42,882 
GBM114,802 165,838 
PB7,159 NR
CC97,154 2,643 
Segment total deposits at March 31, 2020:
RBWM$39,083 NR
WPBNR$48,800 
CMB32,309 32,844 
GBM40,417 42,671 
PB8,201 NR
CC4,305 — 
NR Not Reported
There have been no additional changes in the basis of our segmentation as compared with the presentation in our 2020 Form 10-K.
Net interest income of each segment represents the difference between actual interest earned on assets and interest incurred on liabilities of the segment, adjusted for a funding charge or credit that includes both interest rate and liquidity components. 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 that incorporate both repricing (interest rate risk) and tenor (liquidity) characteristics. The objective of these charges/credits is to transfer interest rate risk to one centralized unit in Markets Treasury. Markets Treasury income statement and balance sheet results are allocated to each of the global businesses based upon tangible equity levels and levels of any surplus liabilities.
Certain other revenue and operating expense amounts are also apportioned among the business segments based upon the benefits derived from this activity or the relationship of this activity to other segment activity. These inter-segment transactions have not been eliminated, and we generally account for them as if they were with third parties.
Our segment results are presented in accordance with HSBC Group accounting and reporting policies, which apply IFRSs as issued by the IASB. As a result, our segment results are prepared and presented using financial information prepared on the Group Reporting Basis as operating results are monitored and reviewed, trends are evaluated and decisions about allocating resources, such as employees, are primarily made on this basis. We continue, however, to monitor capital adequacy and report to regulatory agencies on a U.S. GAAP basis.
There have been no changes in the measurement of segment profit as compared with the presentation in our 2020 Form 10-K.
A summary of significant differences between U.S. GAAP and the Group Reporting Basis as they impact our results are summarized in Note 24, "Business Segments," in our 2020 Form 10-K. There have been no significant changes since December 31, 2020 in the differences between U.S. GAAP and the Group Reporting Basis impacting our results.
The following table summarizes the results for each segment on a Group Reporting Basis, as well as provides a reconciliation of total results under the Group Reporting Basis to U.S. GAAP consolidated totals:
 Group Reporting Basis Consolidated Amounts   
WPBCMBGBMCCTotal
Group Reporting Basis
Adjustments(1)
Group Reporting Basis
Reclassi-
fications(2)
U.S. GAAP
Consolidated
Totals
 (in millions)
Three Months Ended March 31, 2021
Net interest income (expense)$209 $190 $95 $(1)$493 $4 $34 $531 
Other operating income87 66 246 11 410 5 (31)384 
Total operating income296 256 341 10 903 9 3 915 
Expected credit losses /
provision for credit losses		(2)(38)(51)— (91)(136)— (227)
298 294 392 10 994 145 3 1,142 
Operating expenses287 150 201 31 669 10 3 682 
Profit (loss) before income tax$11 $144 $191 $(21)$325 $135 $— $460 
Balances at end of period:
Total assets$63,747 $44,170 $110,524 $1,508 $219,949 $(25,093)$— $194,856 
Total loans, net24,513 22,785 11,676 — 58,974 (1,367)3,066 60,673 
Goodwill— 358 — — 358 100 — 458 
Total deposits49,578 42,874 48,687 — 141,139 (4,472)11,915 148,582 
Three Months Ended March 31, 2020
Net interest income (expense)$232 $210 $90 $(13)$519 $3 $(18)$504 
Other operating income (expense)74 58 263 (24)371 (4)20 387 
Total operating income (expense)306 268 353 (37)890 (1)2 891 
Expected credit losses /
provision for credit losses		140 123 116 — 379 347 — 726 
166 145 237 (37)511 (348)2 165 
Operating expenses1,035 147 192 135 1,509 94 2 1,605 
Profit (loss) before income tax$(869)$(2)$45 $(172)$(998)$(442)$— $(1,440)
Balances at end of period:
Total assets$58,246 $42,882 $165,838 $2,643 $269,609 $(64,532)$— $205,077 
Total loans, net24,478 30,615 23,562 — 78,655 (4,596)6,738 80,797 
Goodwill— 358 — — 358 100 — 458 
Total deposits48,800 32,844 42,671 — 124,315 (7,066)19,474 136,723 
(1)Represents adjustments associated with differences between U.S. GAAP and the Group Reporting Basis.
(2)Represents differences in financial statement presentation between U.S. GAAP and the Group Reporting Basis.