EX-12 2 d72968_ex12.htm COMPUTATION OF RATIO TO EARNINGS TO FIXED CHARGES

Exhibit 12

HSBC USA Inc.
Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock Dividends
(in millions, except ratios)

 

 

 

 

 

 

 

 

Nine months ended September 30

 

2007

 

2006

 

Ratios excluding interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

585

 

$

838

 

Income tax expense

 

 

237

 

 

429

 

Less: Undistributed equity earnings

 

 

5

 

 

19

 

Fixed charges:

 

 

 

 

 

 

 

Interest on:

 

 

 

 

 

 

 

Borrowed funds

 

 

266

 

 

237

 

Long-term debt

 

 

1,087

 

 

1,077

 

One third of rents, net of income from subleases

 

 

21

 

 

18

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

 

1,374

 

 

1,332

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

2,191

 

$

2,580

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.59

 

 

1.94

 

 

 

 

 

 

 

 

 

 

 

 

 

Total preferred stock dividend factor (1)

 

$

105

 

$

95

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,479

 

$

1,427

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.48

 

 

1.81

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios including interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges, excluding interest on deposits

 

$

1,374

 

$

1,332

 

Add: Interest on deposits

 

 

2,841

 

 

2,246

 

 

 

 

 

Total fixed charges, including interest on deposits

 

$

4,215

 

$

3,578

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes and fixed charges, net of undistributed equity earnings

 

$

2,191

 

$

2,580

 

Add: Interest on deposits

 

 

2,841

 

 

2,246

 

 

 

 

 

Total

 

$

5,032

 

$

4,826

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

 

1.19

 

 

1.35

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor

 

$

1,479

 

$

1,427

 

Add: Interest on deposits

 

 

2,841

 

 

2,246

 

 

 

 

 

Fixed charges, including the preferred stock dividend factor and interest on deposits

 

$

4,320

 

$

3,673

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

1.16

 

 

1.31

 

 

 

 

 

 

 

(1)

Preferred stock dividends grossed up to their pretax equivalents.

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