Financial Statements of HSBC USA Inc. (Parent)

12 Months Ended

Dec. 31, 2021

Condensed Financial Information Disclosure [Abstract]

Financial Statements of HSBC USA Inc. (Parent)

Financial Statements of HSBC USA Inc. (Parent)

Condensed parent company financial statements follow:

Balance Sheet At December 31,	2021		2020
	(in millions)
Assets:
Securities held-to-maturity, net of allowance for credit losses of less than $1 million at both December 31, 2021 and 2020 (fair value of $1 million and $2 million at December 31, 2021 and 2020, respectively)	$	1	$	2
Receivables and balances due from subsidiaries	12,944		14,585
Receivables from other HSBC affiliates	2,623		1,276
Investment in subsidiaries:
Banking	20,672		21,897
Other	75		12
Other assets	153		182
Total assets	$	36,468	$	37,954
Liabilities:
Interest, taxes and other liabilities	$	48	$	85
Payables due to subsidiaries	72		4
Payables due to other HSBC affiliates	65		32
Short-term borrowings	3,683		2,998
Short-term borrowings due to subsidiaries(1)	1,500		3,000
Long-term debt(2)	8,561		10,695
Long-term debt due to other HSBC affiliates(2)	5,499		2,849
Total liabilities	19,428		19,663
Total equity	17,040		18,291
Total liabilities and equity	$	36,468	$	37,954

(1)Reflects borrowings from HSBC Bank USA. The outstanding balance matures in July 2023.

(2)Contractual scheduled maturities for the debt over the next five years are as follows: 2022 – $2.9 billion; 2023 – $1.6 billion; 2024 – $2.0 billion; 2025 – $4.5 billion; 2026 – $0.6 billion; and thereafter – $2.5 billion.

Statements of Income (Loss) and Comprehensive Income (Loss) Year Ended December 31,	2021		2020		2019
	(in millions)
Income:
Dividends from banking subsidiaries	$	102	$	121	$	138
Interest from subsidiaries	28		101		350
Interest from other HSBC affiliates	23		43		91
Other income from subsidiaries	—		—		2
Other income from other HSBC Affiliates	1,027		552		1,645
Other income (loss)	(1,023)		(544)		(1,690)
Total income	157		273		536
Expenses:
Interest to subsidiaries	16		6		—
Interest to other HSBC Affiliates	128		115		140
Other interest expense	40		228		549
Provision for credit losses	—		(1)		—
Other expenses with subsidiaries	19		15		12
Other expenses	1		3		5
Total expenses	204		366		706
Loss before taxes and equity in undistributed income (loss) of subsidiaries	(47)		(93)		(170)
Income tax benefit	(33)		(50)		(78)
Loss before equity in undistributed income (loss) of subsidiaries	(14)		(43)		(92)
Equity in undistributed income (loss) of subsidiaries	702		(897)		205
Net income (loss)	$	688	$	(940)	$	113
Other comprehensive income (loss)	(858)		956		87
Comprehensive income (loss)	$	(170)	$	16	$	200

Statement of Cash Flows Year Ended December 31,	2021		2020		2019
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	688	$	(940)	$	113
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1		2		5
Net change in other assets and liabilities	(313)		256		1,463
Undistributed (income) loss of subsidiaries	(702)		897		(205)
Other, net	(4)		(2)		4
Cash provided by (used in) operating activities	(330)		213		1,380
Cash flows from investing activities:
Sales and maturities of securities	1		—		—
Net change in investments in and receivables due from subsidiaries	2,713		(552)		3,929
Net change in receivables from other HSBC affiliates	(1,345)		1,056		183
Other, net	—		—		1
Cash provided by investing activities	1,369		504		4,113
Cash flows from financing activities:
Net change in payables to other HSBC affiliates	13		(1)		4
Net change in short-term borrowings	(815)		3,522		(56)
Issuance of long-term debt	6,844		3,394		2,931
Repayment of long-term debt	(6,000)		(7,565)		(5,897)
Return of capital to parent	(1,000)		—		(2,400)
Other increases (decreases) in capital surplus	(4)		10		—
Dividends paid	(77)		(77)		(77)
Cash used in financing activities	(1,039)		(717)		(5,495)
Net change in cash and due from banks and interest bearing deposits with banks	—		—		(2)
Cash and due from banks and interest bearing deposits with banks at beginning of year	—		—		2
Cash and due from banks and interest bearing deposits with banks at end of year	$	—	$	—	$	—
Cash paid for:
Interest	$	167	$	379	$	662

HSBC Bank USA is subject to legal restrictions on certain transactions with its non-bank affiliates in addition to the restrictions on the payment of dividends to us. See Note 26, "Retained Earnings and Regulatory Capital Requirements," for further discussion.