Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position

The following table summarizes the amounts of derivative instruments reported on our Condensed Consolidated Balance Sheet. The amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories.

Derivative contracts in a receivable and payable position exclude open trade equity on derivatives cleared through central clearing counterparties. Any associated collateral exchanged with our central clearing counterparties are treated as settlements of the derivative exposure, rather than collateral. Such payments are recognized as settlements of the derivatives contracts in a receivable and payable position on our Condensed Consolidated Balance Sheet.

Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.

	September 30, 2018						December 31, 2017
	Derivative contracts in a				Notional amount		Derivative contracts in a				Notional amount
($ in millions)	receivable position		payable position				receivable position		payable position
Derivatives designated as accounting hedges
Interest rate contracts
Swaps	$	—	$	—	$	29,050	$	—	$	—	$	6,915
Foreign exchange contracts
Forwards	—		1		150		—		1		136
Total derivatives designated as accounting hedges	—		1		29,200		—		1		7,051
Derivatives not designated as accounting hedges
Interest rate contracts
Futures and forwards	—		—		9		—		—		23
Written options	1		69		7,074		1		39		8,327
Purchased options	68		—		7,011		38		—		8,237
Total interest rate risk	69		69		14,094		39		39		16,587
Foreign exchange contracts
Futures and forwards	1		—		192		—		1		124
Total foreign exchange risk	1		—		192		—		1		124
Total derivatives not designated as accounting hedges	70		69		14,286		39		40		16,711
Total derivatives	$	70	$	70	$	43,486	$	39	$	41	$	23,762

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The following table presents amounts recorded on our Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.

($ in millions)	Carrying amount of the hedged items				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
					Total					Discontinued (a)
	September 30, 2018		December 31, 2017		September 30, 2018			December 31, 2017		September 30, 2018		December 31, 2017
Assets
Available-for-sale securities (b)	$	1,433	$	173	$	4		$	2	$	4	$	2
Finance receivables and loans, net (c)	41,080		2,305		(52		)	18		8		19
Liabilities
Long-term debt	$	14,200	$	14,640	$	62		$	208	$	87	$	235

(a) Represents the fair value hedging adjustment on qualifying hedges for which the hedging relationship was discontinued. This represents a subset of the amounts reported in the total hedging adjustment.

(b) The carrying amount of hedged available-for-sale securities is presented above using amortized cost. Refer to Note 6 for a reconciliation of the amortized cost and fair value of available-for-sale securities.

(c) The hedged item represents the carrying value of the hedged portfolio of assets. The amount that is identified as the last of layer in the hedge relationship is $19.4 billion as of September 30, 2018. The basis adjustment associated with the last-of-layer relationship is a $60 million liability as of September 30, 2018, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship. A last-of-layer hedge strategy did not exist at December 31, 2017.

Derivative Instruments, Gain (Loss)

The following table summarizes the location and amounts of gains and losses on derivative instruments not designated as accounting hedges reported in our Condensed Consolidated Statement of Comprehensive Income.

	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2018			2017			2018		2017
Gain (loss) recognized in earnings
Interest rate contracts
Gain on mortgage and automotive loans, net	$	—		$	—		$	—	$	1
Other income, net of losses	—			—			—		(3		)
Total interest rate contracts	—			—			—		(2		)
Foreign exchange contracts
Other income, net of losses	(1		)	(3		)	5		(7		)
Total foreign exchange contracts	(1		)	(3		)	5		(7		)
(Loss) gain recognized in earnings	$	(1	)	$	(3	)	$	5	$	(9	)

Derivative Instruments Designated as FV Hedges, Gain (Loss)

The following table summarizes the location and amounts of gains and losses on derivative instruments designated as fair value hedges reported in our Condensed Consolidated Statement of Comprehensive Income. We had no gains or losses on derivative instruments designated as cash flow hedges for the periods shown.

	Interest and fees on finance receivables and loans					Interest and dividends on investment securities and other earning assets						Interest on long-term debt
Three months ended September 30, ($ in millions)	2018			2017		2018			2017			2018			2017
Gain (loss) on fair value hedging relationships
Interest rate contracts
Hedged fixed-rate unsecured debt	$	—		$	—	$	—		$	—		$	20		$	—
Derivatives designated as hedging instruments on fixed-rate unsecured debt	—			—		—			—			(20		)	—
Hedged fixed-rate FHLB advances	—			—		—			—			10			5
Derivatives designated as hedging instruments on fixed-rate FHLB advances	—			—		—			—			(10		)	(5		)
Hedged available-for-sale securities	—			—		(2		)	(3		)	—			—
Derivatives designated as hedging instruments on available-for-sale securities	—			—		2			3			—			—
Hedged fixed-rate retail automotive loans	(9		)	—		—			—			—			—
Derivatives designated as hedging instruments on fixed-rate retail automotive loans	9			—		—			—			—			—
Total gain (loss) on fair value hedging relationships	$	—		$	—	$	—		$	—		$	—		$	—
Total amounts presented in the Condensed Consolidated Statement of Comprehensive Income	$	1,708		$	1,486	$	198		$	157		$	451		$	416

	Interest and fees on finance receivables and loans						Interest and dividends on investment securities and other earning assets						Interest on long-term debt
Nine months ended September 30, ($ in millions)	2018			2017			2018			2017			2018			2017
Gain (loss) on fair value hedging relationships
Interest rate contracts
Hedged fixed-rate unsecured debt	$	—		$	—		$	—		$	—		$	64		$	(23	)
Derivatives designated as hedging instruments on fixed-rate unsecured debt	—			—			—			—			(63		)	24
Hedged fixed-rate FHLB advances	—			—			—			—			53			5
Derivatives designated as hedging instruments on fixed-rate FHLB advances	—			—			—			—			(53		)	(5		)
Hedged available-for-sale securities	—			—			(7		)	(1		)	—			—
Derivatives designated as hedging instruments on available-for-sale securities	—			—			7			1			—			—
Hedged fixed-rate retail automotive loans	(60		)	(3		)	—			—			—			—
Derivatives designated as hedging instruments on fixed-rate retail automotive loans	60			1			—			—			—			—
Total (loss) gain on fair value hedging relationships	$	—		$	(2	)	$	—		$	—		$	1		$	1
Total amounts presented in the Condensed Consolidated Statement of Comprehensive Income	$	4,898		$	4,301		$	562		$	437		$	1,296		$	1,257

Schedule of Derivative Instruments

The following table summarizes the location and amounts of gains and losses related to interest and amortization on derivative instruments designated as fair value and cash flow hedges reported in our Condensed Consolidated Statement of Comprehensive Income.

	Interest and fees on finance receivables and loans						Interest and dividends on investment securities and other earning assets				Interest on deposits				Interest on long-term debt
Three months ended September 30, ($ in millions)	2018			2017			2018		2017		2018		2017		2018			2017
Gain (loss) on fair value hedging relationships
Interest rate contracts
Amortization of deferred unsecured debt basis adjustments	$	—		$	—		$	—	$	—	$	—	$	—	$	13		$	19
Interest for qualifying accounting hedges of unsecured debt	—			—			—		—		—		—		3			7
Amortization of deferred secured debt basis adjustments (FHLB advances)	—			—			—		—		—		—		(6		)	(1		)
Interest for qualifying accounting hedges of secured debt (FHLB advances)	—			—			—		—		—		—		2			1
Amortization of deferred loan basis adjustments	(3		)	(6		)	—		—		—		—		—			—
Interest for qualifying accounting hedges of retail automotive loans held-for-investment	7			—			—		—		—		—		—			—
Total gain (loss) on fair value hedging relationships	4			(6		)	—		—		—		—		12			26
Gain on cash flow hedging relationships
Interest rate contracts
Interest for qualifying accounting hedges of variable-rate borrowings	—			—			—		—		—		—		3			—
Interest for qualifying accounting hedges of deposit liabilities	—			—			—		—		2		—		—			—
Total gain on cash flow hedging relationships	$	—		$	—		$	—	$	—	2		—		$	3		$	—

	Interest and fees on finance receivables and loans						Interest and dividends on investment securities and other earning assets					Interest on deposits				Interest on long-term debt
Nine months ended September 30, ($ in millions)	2018			2017			2018			2017		2018		2017		2018			2017
Gain (loss) on fair value hedging relationships
Interest rate contracts
Amortization of deferred unsecured debt basis adjustments	$	—		$	—		$	—		$	—	$	—	$	—	$	42		$	59
Interest for qualifying accounting hedges of unsecured debt	—			—			—			—		—		—		7			19
Amortization of deferred secured debt basis adjustments (FHLB advances)	—			—			—			—		—		—		(12		)	(2		)
Interest for qualifying accounting hedges of secured debt (FHLB advances)	—			—			—			—		—		—		6			1
Interest for qualifying accounting hedges of available-for-sale securities	—			—			(1		)	—		—		—		—			—
Amortization of deferred loan basis adjustments	(11		)	(17		)	—			—		—		—		—			—
Interest for qualifying accounting hedges of retail automotive loans held-for-investment	5			(1		)	—			—		—		—		—			—
Total (loss) gain on fair value hedging relationships	(6		)	(18		)	(1		)	—		—		—		43			77
Gain on cash flow hedging relationships
Interest rate contracts
Interest for qualifying accounting hedges of variable-rate borrowings	—			—			—			—		—		—		6			—
Interest for qualifying accounting hedges of deposit liabilities	—			—			—			—		2		—		—			—
Total gain on cash flow hedging relationships	$	—		$	—		$	—		$	—	2		—		$	6		$	—

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the effect of cash flow hedges on accumulated other comprehensive loss.

	Three months ended September 30,					Nine months ended September 30,
($ in millions)	2018			2017		2018		2017
Interest rate contracts
(Loss) gain recognized in other comprehensive loss	$	(1	)	$	2	$	22	$	2

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the effect of net investment hedges on accumulated other comprehensive loss and the Condensed Consolidated Statement of Comprehensive Income.

	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2018			2017			2018		2017
Foreign exchange contracts (a) (b)
(Loss) gain recognized in other comprehensive loss	$	(2	)	$	(6	)	$	5	$	(12	)

(a) There were no amounts excluded from effectiveness testing for the three months and nine months endedSeptember 30, 2018, or 2017.

(b) Gains and losses reclassified from accumulated other comprehensive loss are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. There were no amounts reclassified for the three months and nine months endedSeptember 30, 2018, or 2017.