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Business Segments
 9 Months Ended
Sep. 30, 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"), Commercial Banking ("CMB"), Global Banking and Markets ("GBM") and a Corporate Center ("CC").
As of January 1, 2021, we implemented a change to our internal management reporting to prospectively report assets related to our active branches within our WPB segment, which were historically reported within our CC segment. As a result, lease impairment and other related costs associated with these branches is recorded within our WPB segment beginning in 2021. Prior periods were not impacted by this change.
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 September 30, 2021
Net interest income (expense)$202 $200 $74 $(1)$475 $4 $41 $520 
Other operating income (expense)57 70 184 (38)273 4 (35)242 
Total operating income (expense)259 270 258 (39)748 8 6 762 
Expected credit losses /
provision for credit losses
(35)24 (31)— (42)(39)— (81)
294 246 289 (39)790 47 6 843 
Operating expenses279 134 186 55 654 6 6 666 
Profit (loss) before income tax$15 $112 $103 $(94)$136 $41 $— $177 
Three Months Ended September 30, 2020
Net interest income (expense)$200 $202 $92 $(9)$485 $1 $62 $548 
Other operating income110 66 217 40 433 (22)(55)356 
Total operating income310 268 309 31 918 (21)7 904 
Expected credit losses /
provision for credit losses
12 (21)(6)— (15)(90)— (105)
298 289 315 31 933 69 7 1,009 
Operating expenses527 150 251 126 1,054 (276)7 785 
Profit (loss) before income tax$(229)$139 $64 $(95)$(121)$345 $— $224 
 Group Reporting Basis Consolidated Amounts   
WPBCMBGBMCCTotal
Group Reporting Basis
Adjustments(1)
Group Reporting Basis
Reclassi-
fications(2)
U.S. GAAP
Consolidated
Totals
Nine Months Ended September 30, 2021
Net interest income (expense)$616 $580 $255 $(3)$1,448 $17 $109 $1,574 
Other operating income (expense)215 208 613 (9)1,027 (2)(95)930 
Total operating income (expense)831 788 868 (12)2,475 15 14 2,504 
Expected credit losses /
provision for credit losses
(36)(26)(154)— (216)(321)— (537)
867 814 1,022 (12)2,691 336 14 3,041 
Operating expenses921 437 573 157 2,088 48 14 2,150 
Profit (loss) before income tax$(54)$377 $449 $(169)$603 $288 $— $891 
Balances at end of period:
Total assets$69,021 $46,226 $102,543 $1,611 $219,401 $(18,251)$— $201,150 
Total loans, net22,046 20,998 11,290 — 54,334 (1,549)2,266 55,051 
Goodwill— 358 — — 358 100 — 458 
Total deposits39,762 45,239 52,130 — 137,131 (3,668)18,905 152,368 
Nine Months Ended September 30, 2020
Net interest income (expense)$629 $616 $304 $(29)$1,520 $6 $64 $1,590 
Other operating income283 176 743 101 1,303 (45)(51)1,207 
Total operating income912 792 1,047 72 2,823 (39)13 2,797 
Expected credit losses /
provision for credit losses
188 283 129 — 600 240 — 840 
724 509 918 72 2,223 (279)13 1,957 
Operating expenses1,888 439 644 324 3,295 (191)13 3,117 
Profit (loss) before income tax$(1,164)$70 $274 $(252)$(1,072)$(88)$— $(1,160)
Balances at end of period:
Total assets$56,728 $38,096 $136,478 $1,565 $232,867 $(31,921)$— $200,946 
Total loans, net23,821 25,852 14,122 — 63,795 (1,682)3,212 65,325 
Goodwill— 358 — — 358 100 — 458 
Total deposits48,477 39,736 51,566 — 139,779 (5,198)15,747 150,328 
(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.