Loans (Tables)

6 Months Ended

Jun. 30, 2012

Loans, Allowance for Credit Losses and Loans Held for Sale [Abstract]

Components of Loans

	June 30, 2012		December 31, 2011
	(in millions)
Commercial loans:
Construction and other real estate	$	7,977	$	7,860
Business banking and middle markets enterprises		11,256		10,225
Global banking (1)		15,042		12,658
Other commercial		3,142		2,906
Total commercial		37,417		33,649
Consumer loans:
Home equity mortgages		2,455		2,563
Other residential mortgages		14,758		14,113
Credit cards		783		828
Other consumer		651		714
Total consumer		18,647		18,218
Total loans	$	56,064	$	51,867

⁽¹⁾  Represents large multinational firms including globally focused U.S. corporate and financial institutions and USD lending to select high quality Latin American and other multinational customers managed by HSBC on a global basis.

Summary of past due status of loans

	Days Past Due
At June 30, 2012	1 - 29 days		30 - 89 days		90+ days		Total Past Due		Current		Total Loans
	(in millions)
Commercial loans:
Construction and other real estate	$	100	$	38	$	114	$	252	$	7,725	$	7,977
Business banking and middle market enterprises		496		37		51		584		10,672		11,256
Global banking		110		-		8		118		14,924		15,042
Other commercial		554		17		26		597		2,545		3,142
Total commercial		1,260		92		199		1,551		35,866		37,417
Consumer loans:
HELOC and home equity mortgages		145		40		77		262		2,193		2,455
Other residential mortgages		100		465		844		1,409		13,349		14,758
Credit cards		31		15		17		63		720		783
Other consumer		10		5		31		46		605		651
Total consumer		286		525		969		1,780		16,867		18,647
Total loans	$	1,546	$	617	$	1,168	$	3,331	$	52,733	$	56,064

	Days Past Due
At December 31, 2011	1 - 29 days		30 - 89 days		90+ days		Total Past Due		Current		Total Loans
	(in millions)
Commercial loans:
Construction and other real estate	$	72	$	31	$	231	$	334	$	7,526	$	7,860
Business banking and middle market enterprises		615		58		71		744		9,481		10,225
Global banking		898		34		74		1,006		11,652		12,658
Other commercial		350		84		21		455		2,451		2,906
Total commercial		1,935		207		397		2,539		31,110		33,649
Consumer loans:
HELOC and home equity mortgages		181		54		89		324		2,239		2,563
Other residential mortgages		109		526		815		1,450		12,663		14,113
Credit cards		37		20		20		77		751		828
Other consumer		11		6		35		52		662		714
Total consumer		338		606		959		1,903		16,315		18,218
Total loans	$	2,273	$	813	$	1,356	$	4,442	$	47,425		51,867

Summary of Nonaccrual loans and accruing receivables 90 days or more delinquent

	June 30, 2012		December 31, 2011
	(in millions)
Nonaccrual loans:
Commercial:
Real Estate:
Construction and land loans	$	101	$	103
Other real estate		374		512
Business banking and middle markets enterprises		46		58
Global banking		114		137
Other commercial		19		15
Total commercial		654		825
Consumer:
Residential mortgages, excluding home equity mortgages		844		815
Home equity mortgages		77		89
Total residential mortgages (1)		921		904
Other consumer loans		5		8
Total consumer loans		926		912
Nonaccrual loans held for sale		65		91
Total nonaccruing loans		1,645		1,828
Accruing loans contractually past due 90 days or more:
Commercial:
Real Estate:
Construction and land loans		-		-
Other real estate		-		1
Business banking and middle market enterprises		2		11
Global banking		-		-
Other commercial		1		2
Total commercial		3		14
Consumer:
Credit card receivables		17		20
Other consumer		26		27
Total consumer loans		43		47
Total accruing loans contractually past due 90 days or more		46		61
Total nonperforming loans	$	1,691	$	1,889

⁽¹⁾  Nonaccrual residential mortgages includes all receivables which are 90 or more days contractually delinquent as well as second lien loans where the first lien loan that we own or service is 90 or more days contractually delinquent.

Summary of receivables which were modified and as a result became classified as TDR loans

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
	(in millions)
Commercial loans:
Construction and other real estate	$	-	$	70
Business banking and middle market enterprises		-		22
Global banking		-		-
Other commercial		-		-
Total commercial		-		92
Consumer loans:
Residential mortgages		52		108
Credit cards		-		-
Total consumer		52		108
Total	$	52	$	200

Summary of TDR and the related credit loss reserves for TDR loans

	June 30, 2012		December 31, 2011
	(in millions)
TDR Loans (1)(2):
Commercial loans:
Construction and other real estate	$	353	$	342
Business banking and middle market enterprises		86		94
Global banking		-		-
Other commercial		34		37
Total commercial		473		473
Consumer loans:
Residential mortgages		677		608
Credit cards		18		21
Total consumer		695		629
Total TDR Loans (3):	$	1,168	$	1,102

	June 30, 2012		December 31, 2011
	(in millions)
Allowance for credit losses on TDR Loans (4):
Commercial loans:
Construction and other real estate	$	26	$	17
Business banking and middle market enterprises		3		3
Global banking		-		-
Other commercial		-		-
Total commercial		29		20
Consumer loans:
Residential mortgages		97		94
Credit cards		6		7
Total consumer		103		101
Total Allowance for credit losses on TDR Loans	$	132	$	121

⁽¹⁾  TDR Loans are considered to be impaired loans. For consumer loans, all such loans are considered impaired loans regardless of accrual status. For commercial loans, impaired loans include other loans in addition to TDRs which totaled $434 million and $614 million at June 30, 2012 and December 31, 2011, respectively.

⁽²⁾  The TDR Loan balances included in the table above reflect the current carrying amount of TDR Loans and includes all basis adjustments on the loan, such as unearned income, unamortized deferred fees and costs on originated loans, partial charge-offs and premiums or discounts on purchased loans. The following table reflects the unpaid principal balance of TDR Loans:

	June 30, 2012		December 31, 2011
	(in millions)
Commercial loans:
Construction and other real estate	$	374	$	393
Business banking and middle market enterprises		135		147
Global banking		-		-
Other commercial		37		40
Total commercial		546		580
Consumer loans:
Residential mortgages		770		682
Credit cards		18		20
Total consumer		788		702
Total	$	1,334	$	1,282

⁽³⁾  Includes balances of $377 million and $331 million at June 30, 2012 and December 31, 2011, respectively, which are classified as nonaccrual loans.

(4) Included in the allowance for credit losses.

Trouble debt restructuring additional information

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
	(in millions)
Average balance of TDR Loans:
Commercial loans:
Construction and other real estate	$	360	$	357	$	358	$	373
Business banking and middle market enterprises		96		84		98		87
Large corporate		-		-		-		-
Other commercial		35		50		36		49
Total commercial		491		491		492		509
Consumer loans:
Residential mortgages		669		477		653		456
Credit cards		18		24		19		25
Total consumer		687		501		672		481
Total average balance of TDR Loans	$	1,178	$	992	$	1,164	$	990
Interest income recognized on TDR Loans:
Commercial loans:
Construction and other real estate	$	2	$	2	$	4	$	3
Business banking and middle market enterprises		-		-		-		-
Large corporate		-		-		-		-
Other commercial		2		1		3		3
Total commercial		4		3		7		6
Consumer loans:
Residential mortgages		7		5		13		8
Credit cards		-		-		-		1
Total consumer		7		5		13		9
Total interest income recognized on TDR Loans	$	11	$	8	$	20	$	15

Commercial loans classified as TDR Loans

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
	(in millions)
Commercial loans:
Construction and other real estate	$	-	$	-
Business banking and middle market enterprises		-		-
Global banking		-		-
Other commercial		-		-
Total commercial		-		-
Consumer loans:
Residential mortgages		7		13
Credit cards		-		-
Total consumer		7		13
Total	$	7	$	13

Impaired commercial loans considered as TDR Loans

	Amount with Impairment Reserves		Amount without Impairment Reserves		Total Impaired Commercial Loans(1)(2)		Impairment Reserve
	(in millions)
At June 30, 2012:
Construction and other real estate	$	267	$	324	$	591	$	111
Business banking and middle market enterprises		55		60		115		7
Global banking		96		18		114		13
Other commercial		3		84		87		1
Total	$	421	$	486	$	907	$	132
At December 31, 2011:
Construction and other real estate	$	391	$	342	$	733	$	114
Business banking and middle market enterprises		68		59		127		12
Global banking		137		-		137		90
Other commercial		1		89		90		-
Total	$	597	$	490	$	1,087	$	216

⁽¹⁾  Includes impaired commercial loans which are also considered TDR Loans as follows:

	June 30, 2012		December 31, 2011
	(in millions)
Construction and other real estate	$	353	$	342
Business banking and middle market enterprises		86		94
Global banking		-		-
Other commercial		34		37
Total	$	473	$	473

⁽²⁾  The impaired commercial loan balances included in the table above reflect the current carrying amount of the loan and includes all basis adjustments, such as unamortized deferred fees and costs on originated loans, any premiums or discounts and any principal write-downs. The unpaid principal balance of impaired commercial loans included in the table above are as follows:

	June 30, 2012		December 31, 2011
	(in millions)
Construction and other real estate	$	613	$	784
Business banking and middle market enterprises		164		180
Global banking		114		137
Other commercial		90		93
Total	$	981	$	1,194

Average balance and interest income recognized on impaired commercial loans

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
	(in millions)
Average balance of impaired commercial loans:
Construction and other real estate	$	624	$	759	$	660	$	757
Business banking and middle market enterprises		127		161		127		158
Large corporate		66		74		90		84
Other commercial		88		103		89		107
Total average balance of impaired commercial loans	$	905	$	1,097	$	966	$	1,106
Interest income recognized on impaired commercial loans:
Construction and other real estate	$	1	$	2	$	3	$	3
Business banking and middle market enterprises		1		1		2		2
Large corporate		-		-		-		-
Other commercial		1		-		1		1
Total interest income recognized on impaired commercial loans	$	3	$	3	$	6	$	6

Summary of criticized assets for commercial loans

	Special Mention		Substandard		Doubtful		Total
	(in millions)
At June 30, 2012:
Construction and other real estate	$	805	$	969	$	132	$	1,906
Business banking and middle market enterprises		447		155		8		610
Global banking		64		97		96		257
Other commercial		46		74		1		121
Total commercial	$	1,362	$	1,295	$	237	$	2,894
At December 31, 2011:
Construction and other real estate	$	1,009	$	990	$	186	$	2,185
Business banking and middle market enterprises		445		241		12		698
Global banking		45		397		109		551
Other commercial		99		131		-		230
Total commercial	$	1,598	$	1,759	$	307	$	3,664

Status of commercial loan portfolio

	Performing Loans		Nonaccrual Loans		Accruing Loans Contractually Past Due 90 days or More		Total
	(in millions)
At June 30, 2012:
Construction and other real estate	$	7,502	$	475	$	-	$	7,977
Business banking and middle market enterprise		11,208		46		2		11,256
Global banking		14,928		114		-		15,042
Other commercial		3,122		19		1		3,142
Total commercial	$	36,760	$	654	$	3	$	37,417
At December 31, 2011:
Construction and other real estate	$	7,244	$	615	$	1	$	7,860
Business banking and middle market enterprise		10,156		58		11		10,225
Global banking		12,521		137		-		12,658
Other commercial		2,889		15		2		2,906
Total commercial	$	32,810	$	825	$	14	$	33,649

Credit risk profile of commercial loan

	Investment  Grade(1)		Non-Investment Grade		Total
	(in millions)
At June 30, 2012:
Construction and other real estate	$	3,343	$	4,634	$	7,977
Business banking and middle market enterprises		5,608		5,648		11,256
Global banking		13,333		1,709		15,042
Other commercial		1,212		1,930		3,142
Total commercial	$	23,496	$	13,921	$	37,417
At December 31, 2011:
Construction and other real estate	$	3,133	$	4,727	$	7,860
Business banking and middle market enterprises		4,612		5,613		10,225
Global banking		9,712		2,946		12,658
Other commercial		843		2,063		2,906
Total commercial	$	18,300	$	15,349	$	33,649

⁽¹⁾  Investment grade includes commercial loans with borrowers that have credit ratings of at least BBB- or above or the equivalent based on our internal credit rating system.

Delinquency ratio for consumer loan

	June 30, 2012					December 31, 2011
	Dollars of Delinquency		Delinquency Ratio			Dollars of Delinquency		Delinquency Ratio
	(dollars are in millions)
Consumer:
Residential mortgage, excluding home equity mortgages (1)	$	1,107		7.16	%	$	1,101		7.19	%
Home equity mortgages		62		2.33			99		2.89
Total residential mortgages		1,169		6.45			1,200		6.41
Credit card receivables		23		2.62			28		2.25
Other consumer		28		3.68			30		3.17
Total consumer	$	1,220		6.18	%	$	1,258		6.01	%

⁽¹⁾  At June 30, 2012 and December 31, 2011, residential mortgage loan delinquency includes $938 million and $803 million, respectively, of loans that are carried at the lower of amortized cost or fair value less cost to sell.

Status of consumer loan portfolio

	Performing Loans		Nonaccrual Loans		Accruing Loans Contractually Past Due 90 days or More		Total
	(in millions)
At June 30, 2012:
Consumer:
Residential mortgage, excluding home equity mortgages	$	13,914	$	844	$	-	$	14,758
Home equity mortgages		2,378		77		-		2,455
Total residential mortgages		16,292		921		-		17,213
Credit card receivables		766		-		17		783
Other consumer		620		5		26		651
Total consumer	$	17,678	$	926	$	43	$	18,647
At December 31, 2011:
Consumer:
Residential mortgage, excluding home equity mortgages	$	13,298	$	815	$	-	$	14,113
Home equity mortgages		2,474		89		-		2,563
Total residential mortgages		15,772		904		-		16,676
Credit card receivables		808		-		20		828
Other consumer		679		8		27		714
Total consumer	$	17,259	$	912	$	47	$	18,218

High LTV, interest-only and ARM loans

	June 30, 2012		December 31, 2011
	(in billions)
Residential mortgage loans with high LTV and no mortgage insurance (1)	$	1.0	$	1.1
Interest-only residential mortgage loans		4.0		3.9
ARM loans (2)		10.0		9.9

⁽¹⁾  Residential mortgage loans with high LTV and no mortgage insurance includes both fixed rate and adjustable rate mortgages. Excludes $61 million and $68 million of sub-prime residential mortgage loans held for sale at June 30, 2012 and December 31, 2011, respectively.

⁽²⁾  ARM loan balances above exclude $26 million and $28 million of sub-prime residential mortgage loans held for sale at June 30, 2012 and December 31, 2011, respectively. During the remainder of 2012 and during 2013, approximately $104 million and $350 million, respectively, of these ARM loans will experience their first interest rate reset.

First and second liens within outstanding residential mortgage loan portfolio

	June 30, 2012		December 31, 2011
	(in millions)
Closed end:
First lien	$	14,758	$	14,113
Second lien		210		237
Revolving:
Second lien		2,245		2,326
Total	$	17,213	$	16,676