Strategic Initiatives

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

In 2020, we announced a multi-year strategic plan to restructure our operations ("Restructuring Plan") in alignment with HSBC’s global strategy, to refocus our wholesale operations to better serve our international corporate clients and restructure our retail operations to better meet the needs of globally mobile and affluent clients. Our Restructuring Plan also included streamlining our functional and operations support model by removing duplication, reducing the size of our balance sheet to better align with the scope and scale of the U.S. opportunity and investing in systems infrastructure and new technologies. As discussed further in Note 4, "Sale of Certain Branch Assets and Liabilities," during 2021, we also made the decision to exit our mass market retail banking business, including the sale or closure of certain branches.

We completed our Restructuring Plan over the three-year period of 2020-2022 and will no longer incur costs related to this plan. In 2022, we completed the simplification of our support service functions, our planned investments in systems infrastructure and new technologies, and the sale of the branch disposal group associated with the exit of our mass market retail banking business. In 2021, we completed the consolidation of our wholesale and retail middle and back office functions, each under a single operations structure, as well as the exit of certain derivative contracts and the transfer of interest rate derivative contracts associated with Fixed Income activities to HSBC Bank plc. During 2022 and 2021, we recorded $190 million and $289 million, respectively, of pre-tax charges in connection with our Restructuring Plan.

The following table summarizes the changes in the liability associated with our Restructuring Plan during 2022 and 2021:


	Severance and Other Employee Costs(1)		Lease Termination and Associated Costs(2)		Other(3)		Total
	(in millions)


















Year Ended December 31, 2022
Restructuring liability at beginning of period	$	10	$	46	$	—	$	56
Restructuring costs accrued during the period	23		2		28		53
Restructuring costs paid during the period	(17)		(16)		(28)		(61)
Restructuring liability at end of period(4)	$	16	$	32	$	—	$	48

Year Ended December 31, 2021
Restructuring liability at beginning of period	$	10	$	23	$	—	$	33
Restructuring costs accrued during the period	12		38		15		65
Restructuring costs paid during the period	(12)		(15)		(15)		(42)
Restructuring liability at end of period	$	10	$	46	$	—	$	56

(1)Severance and other employee costs are included in salaries and employee benefits in the consolidated statement of income. The majority of these costs were reported in the Wealth and Personal Banking business segment. Not included in these costs are allocated severance costs from HSBC Technology & Services (USA) Inc. ("HTSU") discussed further below.

(2)Primarily includes real estate taxes, service charges and decommissioning costs. Lease termination and associated costs are included in occupancy expense, net in the consolidated statement of income and were reported in the Wealth and Personal Banking and the Corporate Center business segments.

(3)Primarily includes professional fees and other staff costs, which are included in other expenses in the consolidated statement of income. The majority of these costs were reported in the Wealth and Personal Banking business segment.

(4)At December 31, 2023, our remaining liability associated with our Restructuring Plan totaled $15 million.

In addition to the restructuring costs reflected in the rollforward table above, during 2022, we recorded impairment charges of $10 million to write-down the lease ROU assets and leasehold improvement assets associated with certain office space that we determined we would exit. During 2022, we also recorded an impairment charge of $3 million to write-off certain capitalized software.

During the second quarter of 2021, as part of our decision to exit our mass market retail banking business, we determined that we would exit approximately 30 branches. As a result, we recorded impairment charges during 2021 to write-off the assets associated with these branches, including $29 million of lease ROU assets, $18 million of leasehold improvement assets and $3 million of equipment assets. During 2021, we also recorded impairment charges of $40 million to write-down the lease ROU assets and leasehold improvement assets primarily associated with certain office space that we determined we would exit and $13 million to write-down one of our owned office space properties to fair value upon transferring it to held for sale. Lease impairment charges are reflected in occupancy expense, net in the consolidated statement of income and were reported in the Wealth and Personal Banking and the Corporate Center business segments.

In addition, during 2021 we recorded $35 million of trading losses associated with the exit of certain derivative contracts as part of our Restructuring Plan. These losses are included in trading revenue in the consolidated statement of income and were reported in the Markets and Securities Services and the Corporate Center business segments.

Our Restructuring Plan also resulted in costs being allocated to us from HTSU, primarily support service project costs and severance costs, which are reflected in support services from HSBC affiliates in the consolidated statement of income. During 2022 and 2021, we recorded $124 million and $86 million, respectively, of allocated costs from HTSU related to restructuring activities. These costs were reported in the Corporate Center business segment.

HSBC Group Restructuring Separate from the charges related to our Restructuring Plan as detailed above, during 2022 and 2021, we also recorded $131 million and $53 million, respectively, of allocated costs from other HSBC affiliates related to the HSBC Group's restructuring activities, primarily support service project costs and severance costs. These costs are reflected in support services from HSBC affiliates in the consolidated statement of income and were reported in the Corporate Center business segment.