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Business Segments
 3 Months Ended
Mar. 31, 2024
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. There have been no changes in the basis of our segmentation as compared with the presentation in our 2023 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.
During the second quarter of 2023, we implemented a change to our internal management reporting to report net funding charges associated with MSS trading activities within other operating income to better align with the trading revenue generated by such activities. Historically, these funding charges were reported within net interest income (expense). There was no impact to consolidated net interest income (expense) or other operating income as these net funding charges are reversed back into net interest income (expense) in the CC. As a result, we have aligned our segment reporting for MSS and CC to reflect this change for all periods presented. The following table summarizes the impact of this change on reported segment net interest income (expense) and other operating income for the three months ended March 31, 2023:
Three Months Ended
March 31, 2023
As Previously ReportedAfter Reporting Changes
(in millions)
Segment net interest income (expense):
MSS$(68)$13 
CC(26)(107)
Total HUSI Consolidated543 543 
Segment other operating income:
MSS$177 $96 
CC10 91 
Total HUSI Consolidated386 386 
There have been no changes in the measurement of segment profit as compared with the presentation in our 2023 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 2023 Form 10-K. There have been no significant changes since December 31, 2023 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, 2024
Net interest income (expense)$179 $292 $117 $9 $18 $(168)$447 $7 $(28)$426 
Other operating income67 78 84 81 22 173 505 (3)37 539 
Total operating income246 370 201 90 40 5 952 4 9 965 
Expected credit losses / provision for credit losses— (2)(5)— — — (7)9 — 2 
246 372 206 90 40 5 959 (5)9 963 
Operating expenses187 179 131 79 22 75 673 3 9 685 
Profit (loss) before income tax$59 $193 $75 $11 $18 $(70)$286 $(8)$— $278 
Balances at end of period:
Total assets$37,255 $56,195 $10,165 $33,767 $40,290 $3,889 $181,561 $(14,595)$— $166,966 
Total loans, net23,955 23,880 9,717 73 367 — 57,992 (561)1,785 59,216 
Goodwill— 358 — — — — 358 100 — 458 
Total deposits29,936 40,214 41,137 1,157 1,839 — 114,283 (1,750)9,520 122,053 
Three Months Ended March 31, 2023
Net interest income (expense)$213 $285 $139 $13 $— $(107)$543 $1 $(61)$483 
Other operating income52 72 54 96 21 91 386 (7)74 453 
Total operating income (expense)265 357 193 109 21 (16)929 (6)13 936 
Expected credit losses / provision for credit losses10 16 3 — — — 29 (9)— 20 
255 341 190 109 21 (16)900 3 13 916 
Operating expenses175 150 135 69 18 32 579 37 13 629 
Profit (loss) before income tax$80 $191 $55 $40 $3 $(48)$321 $(34)$— $287 
Balances at end of period:
Total assets$42,518 $54,607 $10,506 $34,692 $37,546 $2,496 $182,365 $(15,815)$— $166,550 
Total loans, net22,429 24,793 9,812 507 273 — 57,814 (747)1,807 58,874 
Goodwill— 358 — — — — 358 100 — 458 
Total deposits31,166 43,229 40,422 1,260 1,378 — 117,455 (2,022)6,735 122,168 
(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.