Significant Credit Concentrations

12 Months Ended

Dec. 31, 2016

Concentration Risk Disclosure [Abstract]

Significant Credit Concentrations

Note 12–Significant Credit Concentrations

Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to Credco’s total credit exposure. Credco’s primary credit exposure, Card Member receivables and loans and loans to affiliates and other, is diversified among its affiliated companies with Card Members that operate in diverse industries, economic sectors and geographic regions.

The following table details Credco’s maximum credit exposure by category, including the credit exposure associated with derivative financial instruments, as of December 31:

(Billions)			2016		2015
On-balance sheet:
	Individuals(a)	$	7	$	7
	Financial institutions(b)		2		1
	Loans to affiliates and other		11		14
	Due from affiliates		1		1
	All other(c)		11		10
Total on-balance sheet(d)		$	32	$	33

• Individuals primarily include Card Member receivables and loans, including the HFS portfolio in 2015.
• Financial institutions primarily include debt obligations of banks, broker-dealers, insurance companies and savings and loan associations.
• All other primarily includes Card Member receivables from other corporate institutions.
• Certain distinctions between categories require management judgment.

As of December 31, 2016 and 2015, Credco’s most significant concentration of credit risk was with individuals and corporate institutions, including Card Member receivables and loans. Credco purchased Card Member receivables and loans from TRS and certain of its subsidiaries. TRS generally advances these amounts on an unsecured basis. However, TRS reviews each potential customer’s credit application and evaluates the applicant’s financial history and ability and willingness to repay. TRS also considers, on behalf of Credco, credit performance by customer tenure, industry and geographic location in managing credit exposure.

The following table details Credco’s Card Member receivables and loans exposure in the United States and outside the United States as of December 31:

(Billions)		2016		2015
United States(a)	$	14	$	13
Outside the United States		5		5
Total(b)(c)	$	19	$	18

• Includes Card Member receivables HFS for December 31, 2015.
• Represents Card Member loans to individuals as well as receivables from individuals and corporate institutions as discussed in footnotes (a) and (c) from the previous table.
• The remainder of Credco’s on-balance sheet exposure includes cash and cash equivalents, loans to affiliates and other, due from affiliates and other assets including the credit exposure associated with derivative financial instruments. The majority of these balances areoutside the United States.