XML 32 R23.htm IDEA: XBRL DOCUMENT v3.22.1
Business Segments
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Business Segments Business Segments
We have distinct businesses, which are aligned with HSBC's global business strategy: Wealth and Personal Banking ("WPB"), Commercial Banking ("CMB"), and Global Banking and Markets ("GBM"). These businesses and a Corporate Center ("CC") serve as our reportable segments with the exception of GBM. Our GBM business is comprised of three distinct operating segments: Global Banking ("GB"), Markets and Securities Services ("MSS"), and Global Banking and Markets Other ("GBM Other"), which are separately reported as discussed further below.
During the fourth quarter of 2021, we implemented a change to our internal management reporting to align with changes to the governance structure and how we assess business performance of our GBM business, which is now being reported and managed as three separate operating segments: GB, MSS and GBM Other. As a result, we have aligned our segment reporting to reflect this change for all periods presented.
The following table summarizes the impact of this change on reported segment profit (loss) before tax, total assets and total deposits as of and for the three months ended March 31, 2021:
As Previously ReportedAfter Reporting Changes
(in millions)
Segment profit (loss) before tax during the three months ended March 31, 2021:
GBM$191 NSR
GBNSR$144 
MSSNSR48 
GBM OtherNSR(1)
Segment total assets at March 31, 2021:
GBM$110,524 NSR
GBNSR$11,284 
MSSNSR55,433 
GBM Other(1)
NSR43,807 
Segment total deposits at March 31, 2021:
GBM$48,687 NSR
GBNSR$44,768 
MSSNSR2,220 
GBM OtherNSR1,699 
NSR Not Separately Reported
(1)Includes assets allocated from Markets Treasury.
There have been no additional changes in the basis of our segmentation as compared with the presentation in our 2021 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 2021 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 25, "Business Segments," in our 2021 Form 10-K. There have been no significant changes since December 31, 2021 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   
GBM
WPBCMBGBMSSGBM OtherCCTotal
Group Reporting Basis
Adjust-
ments(1)
Group Reporting Basis
Reclassi-
fications(2)
U.S. GAAP
Consolidated
Totals
 (in millions)
Three Months Ended March 31, 2022
Net interest income (expense)$169 $185 $78 $16 $(2)$(1)$445 $1 $31 $477 
Other operating income163 83 124 142 24 (8)528 (20)(22)486 
Total operating income (expense)332 268 202 158 22 (9)973 (19)9 963 
Expected credit losses / provision for credit losses4 (27)(2)— — — (25)36 — 11 
328 295 204 158 22 (9)998 (55)9 952 
Operating expenses242 147 117 69 24 66 665 12 9 686 
Profit (loss) before income tax$86 $148 $87 $89 $(2)$(75)$333 $(67)$— $266 
Balances at end of period:
Total assets$46,143 $52,519 $10,988 $39,648 $44,165 $2,030 $195,493 $(18,477)$— $177,016 
Total loans, net21,675 23,484 10,533 194 1,219 — 57,105 (1,566)2,604 58,143 
Goodwill— 358 — — — — 358 100 — 458 
Total deposits40,217 40,746 43,355 1,358 743 — 126,419 (2,821)7,577 131,175 
Three Months Ended March 31, 2021
Net interest income (expense)$209 $190 $83 $13 $(1)$(1)$493 $4 $34 $531 
Other operating income87 66 105 116 25 11 410 5 (31)384 
Total operating income296 256 188 129 24 10 903 9 3 915 
Expected credit losses / provision for credit losses(2)(38)(50)— (1)— (91)(136)— (227)
298 294 238 129 25 10 994 145 3 1,142 
Operating expenses287 150 94 81 26 31 669 10 3 682 
Profit (loss) before income tax$11 $144 $144 $48 $(1)$(21)$325 $135 $— $460 
Balances at end of period:
Total assets$63,747 $44,170 $11,284 $55,433 $43,807 $1,508 $219,949 $(25,093)$— $194,856 
Total loans, net24,513 22,785 10,869 149 658 — 58,974 (1,367)3,066 60,673 
Goodwill— 358 — — — — 358 100 — 458 
Total deposits49,578 42,874 44,768 2,220 1,699 — 141,139 (4,472)11,915 148,582 
(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.