HSBC USA Inc. and HSBC Bank USA N.A. are core operating subsidiaries of HSBC Holdings PLC and benefit from group support. HSBC Bank USA N.A. is one of the largest banks in the U.S. with a diversified set of businesses. Asset quality performance is improving, mainly because of the shedding of noncore assets. Profitability has been relatively low compared with peers'. Earnings power is mediocre, and the bank relies more on volatile capital-market revenues. Regulatory risk remains high, stemming from deferred prosecution agreement. The Federal Reserve objected to HSBC USA's Comprehensive Capital Analysis and Review submission for qualitative reasons. The rating outlook on HSBC USA Inc. and its bank subsidiary, HSBC Bank USA N.A., is negative, reflecting Standard&Poor's
