v3.25.2
Business Segments
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2024:
As Previously ReportedAfter Reporting Changes
(in millions)
Segment profit (loss) before tax during the three months ended June 30, 2024:
IWPB(1)
$37 $37 
CIBNR231 
CMB143 NR
GB81NR
MSS5NR
GBM Other2NR
CC(42)(42)
Segment profit (loss) before tax during the six months ended June 30, 2024:
IWPB(1)
$96 $96 
CIBNR528 
CMB336 NR
GB156NR
MSS16NR
GBM Other20NR
CC(112)(112)
Segment total assets at June 30, 2024:
IWPB(1)
$37,020 $37,020 
CIBNR137,187 
CMB(2)
54,024 NR
GB9,777 NR
MSS36,571 NR
GBM Other36,815 NR
CC3,573 3,573 
Segment total deposits at June 30, 2024:
IWPB(1)
$28,602 $28,602 
CIBNR82,257 
CMB38,866 NR
GB41,277 NR
MSS1,067 NR
GBM Other1,047 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 June 30, 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 June 30, 2025
Net interest income (expense)$188 $460 $(85)$563 $6 $(46)$523 
Other operating income64 313 85 462 — 56 518 
Total operating income252 773 — 1,025 6 10 1,041 
Expected credit losses / provision for credit losses1 63 — 64 (22)— 42 
251 710 — 961 28 10 999 
Operating expenses:
Direct Costs106 115 13 234 N/AN/AN/A
Indirect Costs97 327 29 453 N/AN/AN/A
Total operating expenses203 442 42 687 (1)10 696 
Profit (loss) before income tax$48 $268 $(42)$274 $29 $— $303 
Three Months Ended June 30, 2024
Net interest income (expense)$175 $414 $(159)$430 $6 $(24)$412 
Other operating income58 288 160 506 (3)34 537 
Total operating income233 702 1 936 3 10 949 
Expected credit losses / provision for credit losses(2)42 — 40 7 — 47 
235 660 1 896 (4)10 902 
Operating expenses:
Direct Costs98 106 51 255 N/AN/AN/A
Indirect Costs100 323 (8)415 N/AN/AN/A
Total operating expenses198 429 43 670 4 10 684 
Profit (loss) before income tax$37 $231 $(42)$226 $(8)$— $218 
 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)
Six Months Ended June 30, 2025
Net interest income (expense)$374 $933 $(185)$1,122 $12 $(85)$1,049 
Other operating income115 636 181 932 (3)105 1,034 
Total operating income (expense)489 1,569 (4)2,054 9 20 2,083 
Expected credit losses / provision for credit losses3 147 — 150 10 — 160 
486 1,422 (4)1,904 (1)20 1,923 
Operating expenses:
Direct Costs192 225 55 472 N/AN/AN/A
Indirect Costs196 640 19 855 N/AN/AN/A
Total operating expenses388 865 74 1,327 9 20 1,356 
Profit (loss) before income tax$98 $557 $(78)$577 $(10)$— $567 
Balances at end of period:
Total assets$38,525 $151,215 $4,243 $193,983 $(17,616)$— $176,367 
Total loans, net27,369 34,566 — 61,935 (1,684)3,334 63,585 
Goodwill— 358 — 358 100 — 458 
Total deposits27,247 91,520 — 118,767 (1,598)9,012 126,181 
Six Months Ended June 30, 2024
Net interest income (expense)$354 $850 $(327)$877 $13 $(52)$838 
Other operating income125 553 333 1,011 (6)71 1,076 
Total operating income479 1,403 6 1,888 7 19 1,914 
Expected credit losses / provision for credit losses(2)35 — 33 16 — 49 
481 1,368 6 1,855 (9)19 1,865 
Operating expenses:
Direct Costs187 209 136 532 N/AN/AN/A
Indirect Costs198 631 (18)811 N/AN/AN/A
Total operating expenses385 840 118 1,343 7 19 1,369 
Profit (loss) before income tax$96 $528 $(112)$512 $(16)$— $496 
Balances at end of period:
Total assets$37,020 $137,187 $3,573 $177,780 $(14,718)$— $163,062 
Total loans, net24,834 34,191 — 59,025 (705)1,774 60,094 
Goodwill— 358 — 358 100 — 458 
Total deposits28,602 82,257 — 110,859 (2,425)10,911 119,345 
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.