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85
8 Segment analysis
We manage and report our operations according to the following global lines of business: Commercial Banking, Global
Banking and Markets, as well as Retail Banking and Wealth Management. Various estimate and allocation methodologies
are used in the preparation of the global lines of business financial information. We allocate expenses directly related to
earning revenues to the global lines of business that earned the related revenue. Expenses not directly related to earning
revenue, such as overhead expenses, are allocated to global lines of business using appropriate allocation formulas.
Global lines of business net interest income reflects internal funding charges and credits on the global lines of business
assets, liabilities and capital, at market rates, taking into account relevant terms. The offset of the net impact of these
charges and credits is reflected in Global Banking and Markets.
As a result of the bank’s previous decision to wind-down the consumer finance business in Canada and in order to
more appropriately reflect the bank’s active global lines of business, effective for 2013, results previously reported as
the ‘Consumer Finance’ segment have been included under Retail Banking and Wealth Management, with exception of
results relating to corporate credit cards, which are included under Commercial Banking. The results for the comparative
period have been restated to reflect this change. Profit before income tax relating to Consumer Finance of $88m
(2012: $73m) is included in Retail Banking and Wealth Management and $5m (2012: $4m) in Commercial Banking.
A description of each customer group is as follows:
Commercial Banking
Commercial Banking is segmented into Corporate, to serve both large and mid-market companies with more sophisticated
financial needs, and Business Banking, to serve small and medium-sized enterprises (‘SME’s), enabling differentiated
coverage of our target customers. Client offering includes Credit and Lending; International trade and receivables
finance; Payments and Cash Management; and Global Banking and Markets.
Global Banking and Markets
Global Banking and Markets provides tailored financial solutions to major government, corporate and institutional clients
worldwide. Managed as a global business, Global Banking and Markets operates a long-term relationship management
approach to build a full understanding of clients’ financial requirements. Sector-focused client service teams comprising
of relationship managers and product specialists develop financial solutions to meet individual client needs. Global
Banking and Markets is managed as three principal business lines: Markets, Capital Financing and Banking.
Retail Banking and Wealth Management
Retail Banking and Wealth Management provides banking and wealth management services for our personal customers
to help them to manage their finances and protect and build their financial future. Customer offerings include: liability-
driven services (deposits and account services), asset-driven services (credit and lending), and fee-driven and other
services (financial advisory and asset management).
Other
‘Other’ contains the results of movements in fair value of own debt, income related to information technology services
provided to HSBC Group companies on an arm’s length basis with associated recoveries and other transactions which
do not directly relate to our global lines of business.