v3.25.1
Business Segments
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Business Segments Business Segments
We have three distinct business segments that we utilize for management reporting and analysis purposes, which are aligned with HSBC's business strategy. We previously announced as part of simplifying the HSBC Group's organizational structure that we would combine our Commercial Banking ("CMB") and Global Banking and Markets ("GBM") businesses to create a single Corporate and Institutional Banking ("CIB") business, and we would rename our Wealth and Personal Banking ("WPB") business International Wealth and Premier Banking ("IWPB"). During the first quarter of 2025, we implemented changes to our internal management reporting to report what was historically CMB and GBM, including Global Banking ("GB"), Markets and Securities Services ("MSS") and Global Banking and Markets Other ("GBM Other"), together within a newly created CIB business segment, and to rename our WPB business segment IWPB. As a result, IWPB and CIB along with a Corporate Center ("CC") are our reportable segments, and we have aligned our segment reporting to reflect these changes for all periods presented.
The following table summarizes the impact of these changes on reported segment profit (loss) before tax, total assets and total deposits as of and for the three months ended March 31, 2024:
As Previously ReportedAfter Reporting Changes
(in millions)
Segment profit (loss) before tax during the three months ended March 31, 2024:
IWPB(1)
$59 $59 
CIBNR297 
CMB193 NR
GB75NR
MSS11NR
GBM Other18NR
CC(70)(70)
Segment total assets at March 31, 2024:
IWPB(1)
$37,255 $37,255 
CIBNR140,417 
CMB(2)
56,195 NR
GB10,165 NR
MSS33,767 NR
GBM Other40,290 NR
CC3,889 3,889 
Segment total deposits at March 31, 2024:
IWPB(1)
$29,936 $29,936 
CIBNR84,347 
CMB40,214 NR
GB41,137 NR
MSS1,157 NR
GBM Other1,839 NR
CC— — 
NR Not Reported
(1)Previously referred to as WPB.
(2)Segment total assets included goodwill that was previously allocated to CMB of $358 million at March 31, 2024.
There have been no additional changes in the basis of our segmentation as compared with the presentation in our 2024 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.
Net funding charges associated with CIB trading activities are reported within other operating income to align with the trading revenue generated by such activities. These net funding charges are reversed back into net interest income in the CC. 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 the activity or the relationship of the 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.
As a wholly-owned subsidiary, a significant portion of our operating expenses is allocated to us and relates to services that we receive from other HSBC affiliates which are discussed further in Note 12, "Related Party Transactions." As a result, our segment-level information that is regularly provided to the chief operating decision maker breaks down operating expenses into two categories: (a) direct costs, which include salaries and employee benefits, occupancy expense, equipment and software, marketing, outside services, professional fees, deposit insurance assessment fees, expense related to legal matters, and other miscellaneous expenses that the segments directly incur, and (b) indirect costs, which primarily include allocated support service costs from HTSU and other HSBC affiliates. In addition, certain corporate function activities which are reported in direct costs in the CC are allocated from the CC to the other business segments within indirect costs.
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. We continue, however, to monitor capital adequacy and report to regulatory agencies on a U.S. GAAP basis. Our Chief Executive Officer, who is the chief operating decision maker, primarily uses segment profit (loss) before income tax under the Group Reporting Basis in monitoring and assessing segment performance, evaluating trends, and deciding how to allocate resources, such as employees.
There have been no changes in the measurement of segment profit as compared with the presentation in our 2024 Form 10-K.
A summary of significant differences between U.S. GAAP and the Group Reporting Basis as they impact our results is presented in Note 25, "Business Segments," in our 2024 Form 10-K. There have been no significant changes since December 31, 2024 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   
IWPBCIBCCTotal
Group Reporting Basis
Adjust-
ments(1)
Group Reporting Basis
Reclassi-
fications(2)
U.S. GAAP
Consolidated
Totals
 (in millions)
Three Months Ended March 31, 2025
Net interest income (expense)$186 $473 $(100)$559 $6 $(39)$526 
Other operating income51 323 96 470 (3)49 516 
Total operating income (expense)237 796 (4)1,029 3 10 1,042 
Expected credit losses / provision for credit losses2 84 — 86 32 — 118 
235 712 (4)943 (29)10 924 
Operating expenses:
Direct Costs86 110 42 238 N/AN/AN/A
Indirect Costs99 313 (10)402 N/AN/AN/A
Total operating expenses185 423 32 640 10 10 660 
Profit (loss) before income tax$50 $289 $(36)$303 $(39)$— $264 
Balances at end of period:
Total assets$38,299 $142,336 $4,416 $185,051 $(12,610)$— $172,441 
Total loans, net27,234 33,906 — 61,140 (771)2,411 62,780 
Goodwill— 358 — 358 100 — 458 
Total deposits28,046 88,647 — 116,693 (2,362)11,393 125,724 
Three Months Ended March 31, 2024
Net interest income (expense)$179 $436 $(168)$447 $7 $(28)$426 
Other operating income67 265 173 505 (3)37 539 
Total operating income246 701 5 952 4 9 965 
Expected credit losses / provision for credit losses— (7)— (7)9 — 2 
246 708 5 959 (5)9 963 
Operating expenses:
Direct Costs89 103 85 277 N/AN/AN/A
Indirect Costs98 308 (10)396 N/AN/AN/A
Total operating expenses187 411 75 673 3 9 685 
Profit (loss) before income tax$59 $297 $(70)$286 $(8)$— $278 
Balances at end of period:
Total assets$37,255 $140,417 $3,889 $181,561 $(14,595)$— $166,966 
Total loans, net23,955 34,037 — 57,992 (561)1,785 59,216 
Goodwill— 358 — 358 100 — 458 
Total deposits29,936 84,347 — 114,283 (1,750)9,520 122,053 
N/A Not Applicable
(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.