Financial Derivatives

12 Months Ended

Dec. 31, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Financial Derivatives

Note15Financial Derivatives

We use derivative financial instruments (derivatives) primarily to help manage exposure to interest rate, market and credit risk and reduce the effects that changes in interest rates may have on net income, the fair value of assets and liabilities, and cash flows. We also enter into derivatives with customers to facilitate their risk management activities.

Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional amount and an underlying as specified in the contract. Derivative transactions are often measured in terms of notional amount, but this amount is generally not exchanged and it is not recorded on the balance sheet. The notional amount is the basis to which the underlying is applied to determine required payments under the derivative contract. The underlying is a referenced interest rate(commonly LIBOR), security price, credit spread or other index. Residential and commercial real estate loan commitments associated with loans to be sold also qualify as derivative instruments.

The following table presents the notional amounts and gross fair values of all derivative assets and liabilities held by PNC:

Table 124: Total Gross Derivatives
			December 31, 2014						December 31, 2013
			Notional/		Asset		Liability		Notional/		Asset		Liability
			Contract		Fair		Fair		Contract		Fair		Fair
In millions			Amount		Value (a)		Value (b)		Amount		Value (a)		Value (b)
Derivatives designated as hedging instruments under GAAP		$	49,061	$	1,261	$	186	$	36,197	$	1,189	$	364
Derivatives not designated as hedging instruments under GAAP			291,256		3,973		3,841		345,059		3,604		3,570
Total gross derivatives		$	340,317	$	5,234	$	4,027	$	381,256	$	4,793	$	3,934
(a)	Included in Other assets on our Consolidated Balance Sheet.
(b)	Included in Other liabilities on our Consolidated Balance Sheet.

All derivatives are carried on our Consolidated Balance Sheet at fair value. Derivative balances are presented on the Consolidated Balance Sheet on a net basis taking into consideration the effects of legally enforceable master netting agreements and any related cash collateral exchanged with counterparties. Further discussion regarding the rights of setoff associated with these legally enforceable master netting agreements is included in the Offsetting, Counterparty Credit Risk, and Contingent Features section below. Our exposure related to risk participations where we sold protection is discussed in the Credit Derivatives section below. Any nonperformance risk, including credit risk, is included in the determination of the estimated net fair value of the derivatives.

Further discussion on how derivatives are accounted for is included in Note 1 Accounting Policies.

Derivatives Designated As Hedging Instruments under GAAP

Certain derivatives used to manage interest rate and foreign exchange risk as part of our asset and liability risk management activities are designated as accounting hedges under GAAP. Derivatives hedging the risks associated with changes in the fair value of assets or liabilities are considered fair value hedges, derivatives hedging the variability of expected future cash flows are considered cash flow hedges, and derivatives hedging a net investment in a foreign subsidiary are considered net investment hedges. Designating derivatives as accounting hedges allows for gains and losses on those derivatives, to the extent effective, to be recognized in the income statement in the same period the hedged items affect earnings.

Further detail regarding the notional amounts and fair values related to derivatives designated in hedge relationships is presented in the following table:

Table 125: Derivatives Designated As Hedging Instruments under GAAP
					December 31, 2014						December 31, 2013
					Notional/		Asset		Liability		Notional/		Asset		Liability
					Contract		Fair		Fair		Contract		Fair		Fair
In millions					Amount		Value (a)		Value (b)		Amount		Value (a)		Value (b)
	Interest rate contracts:
		Fair value hedges:
			Receive-fixed swaps	$	20,930	$	827	$	38	$	16,446	$	871	$	230
			Pay-fixed swaps (c)		4,233		3		138		4,076		54		66
			Subtotal	$	25,163	$	830	$	176	$	20,522	$	925	$	296
		Cash flow hedges:
			Receive-fixed swaps	$	19,991	$	400	$	10	$	14,737	$	264	$	58
			Forward purchase commitments		2,778		25
			Subtotal	$	22,769	$	425	$	10	$	14,737	$	264	$	58
	Foreign exchange contracts:
		Net investment hedges			1,129		6				938				10
Total derivatives designated as hedging instruments				$	49,061	$	1,261	$	186	$	36,197	$	1,189	$	364
(a)		Included in Other assets on our Consolidated Balance Sheet.
(b)		Included in Other liabilities on our Consolidated Balance Sheet.
(c)		Includes zero-coupon swaps.

Fair Value Hedges

We enter into receive-fixed, pay-variable interest rate swaps to hedge changes in the fair value of outstanding fixed-rate debt and borrowings caused by fluctuations in market interest rates. We also enter into pay-fixed, receive-variable interest rate swaps and zero-coupon swaps to hedge changes in the fair value of fixed rate and zero-coupon investment securities caused by fluctuations in market interest rates. For these hedge relationships, we use statistical regression analysis to assess hedge effectiveness at both the inception of the hedge relationship and on an ongoing basis. There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness.

Further detail regarding gains (losses) on fair value hedge derivatives and related hedged items is presented in the following table:

Table 126: Gains (Losses) on Derivatives and Related Hedged Items - Fair Value Hedges

Year ended

December 31, 2014

December 31, 2013

December 31, 2012

Gain (Loss)

Gain (Loss)

Gain (Loss)

Gain

on Related

Gain

on Related

Gain

on Related

(Loss) on

Hedged

(Loss) on

Hedged

(Loss) on

Hedged

Derivatives

Items

Derivatives

Items

Derivatives

Items

Recognized

Recognized

Recognized

Recognized

Recognized

Recognized

in Income

in Income

in Income

in Income

in Income

in Income

In millions

Hedged Items

Location

Amount

Amount

Amount

Amount

Amount

Amount

Interest rate contracts

U.S. Treasury and Government Agencies Securities

Investment securities (interest income)

$

(111)

$

116

$

102

$

(107)

$

(26)

$

23

Interest rate contracts

Other Debt Securities

Investment securities (interest income)

9

(8)

(1)

1

Interest rate contracts

Subordinated debt

Borrowed funds (interest expense)

78

(106)

(393)

368

(30)

(9)

Interest rate contracts

Bank notes and senior debt

Borrowed funds (interest expense)

45

(52)

(351)

343

68

(80)

Total (a)

$

12

$

(42)

$

(633)

$

596

$

11

$

(65)

(a) The ineffective portion of the change in value of our fair value hedge derivatives resulted in net losses of $30 million for 2014 compared with net losses of $37 million for 2013 and net losses of $54 million for 2012.

Cash Flow Hedges

We enter into receive-fixed, pay-variable interest rate swaps to modify the interest rate characteristics of designated commercial loans from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes. For these cash flow hedges, any changes in the fair value of the derivatives that are effective in offsetting changes in the forecasted interest cash flows are recorded in Accumulated other comprehensive income and are reclassified to interest income in conjunction with the recognition of interest received on the loans. In the 12 months that follow December 31,2014, we expect to reclassify from the amount currently reported in Accumulated other comprehensive income, net derivative gains of $245 million pretax, or $159 million after-tax, in association with interest received on the hedged loans. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to December 31,2014. The maximum length of time over which forecasted loan cash flows are hedged is 10 years. We use statistical regression analysis to assess the effectiveness of these hedge relationships at both the inception of the hedge relationship and on an ongoing basis.

We also periodically enter into forward purchase and sale contracts to hedge the variability of the consideration that will be paid or received related to the purchase or sale of investment securities. The forecasted purchase or sale is consummated upon gross settlement of the forward contract itself. As a result, hedge ineffectiveness, if any, is typically minimal. Gains and losses on these forward contracts are recorded in Accumulated other comprehensive income and are recognized in earnings when the hedged cash flows affect earnings. In the 12 months that follow December 31,2014, we expect to reclassify from the amount currently reported in Accumulated other comprehensive income, net derivative gains of $26 million pretax, or $17 million after-tax, as adjustments of yield on investment securities. As of December 31,2014, the maximum length of time over which forecasted purchase contracts are hedged is two months.

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness related to either cash flow hedge strategy.

During2014, 2013, and 2012, there were no gains or losses from cash flow hedge derivatives reclassified to earnings because it became probable that the original forecasted transaction would not occur.

Further detail regarding gains (losses) on derivatives and related cash flows is presented in the following table:

Table 127: Gains (Losses) on Derivatives and Related Cash Flows - Cash Flow Hedges (a) (b)
				Year ended
				December 31
In millions				2014		2013		2012
Gains (losses) on derivatives recognized in OCI - (effective portion)			$	431	$	(141)	$	312
Less: Gains (losses) reclassified from accumulated OCI into income - (effective portion)
	Interest income			263		337		456
	Noninterest income			-		49		76
Total gains (losses) reclassified from accumulated OCI into income - (effective portion)				263		386		532
Net unrealized gains (losses) on cash flow hedge derivatives			$	168	$	(527)	$	(220)
(a)		All cash flow hedge derivatives are interest rate contracts as of December 31, 2014, December 31, 2013 and December 31, 2012.
(b)		The amount of cash flow hedge ineffectiveness recognized in income was not material for the periods presented.

Net Investment Hedges

We enter into foreign currency forward contracts to hedge non-U.S. Dollar (USD) net investments in foreign subsidiaries against adverse changes in foreign exchange rates. We assess whether the hedging relationship is highly effective in achieving offsetting changes in the value of the hedge and hedged item by qualitatively verifying that the critical terms of the hedge and hedged item match at the inception of the hedging relationship and on an ongoing basis. There were no components of derivative gains or losses excluded from the assessment of the hedge effectiveness.

For2014, 2013, and 2012, there was no net investment hedge ineffectiveness.

Further detail on gains (losses) on net investment hedge derivatives is presented in the following table:

Table 128: Gains (Losses) on Derivatives - Net Investment Hedges
		Year ended
		December 31
In millions			2014		2013		2012
Gains (losses) on derivatives recognized in OCI (effective portion)
	Foreign exchange contracts	$	54	$	(21)	$	(27)

Derivatives Not Designated As Hedging Instruments under GAAP

We also enter into derivatives that are not designated as accounting hedges under GAAP.

Further detail regarding the notional amounts and fair values related to derivatives not designated in hedge relationships is presented in the following table:

Table 129: Derivatives Not Designated As Hedging Instruments under GAAP
					December 31, 2014						December 31, 2013
					Notional/		Asset		Liability		Notional/		Asset		Liability
					Contract		Fair		Fair		Contract		Fair		Fair
In millions					Amount		Value (a)		Value (b)		Amount		Value (a)		Value (b)
Derivatives used for residential mortgage banking activities:
Residential mortgage servicing
	Interest rate contracts:
		Swaps		$	32,459	$	777	$	394	$	37,424	$	654	$	360
		Swaptions			1,498		29		22		845		18		18
		Futures (c)			22,084						49,250
		Futures options			12,225		4				24,000		10		2
		Mortgage-backed securities commitments			710		4				832				3
			Subtotal	$	68,976	$	814	$	416	$	112,351	$	682	$	383
Loan sales
	Interest rate contracts:
		Futures (c)		$	58					$	350
		Bond options			300						200	$	1
		Mortgage-backed securities commitments			4,916	$	10	$	21		5,173		26	$	9
		Residential mortgage loan commitments			1,852		22				1,605		13
			Subtotal	$	7,126	$	32	$	21	$	7,328	$	40	$	9
			Subtotal	$	76,102	$	846	$	437	$	119,679	$	722	$	392
Derivatives used for commercial mortgage banking activities:
	Interest rate contracts:
		Swaps		$	3,801	$	67	$	48	$	2,158	$	23	$	52
		Swaptions			439		2		1		125				3
		Futures (c)			19,913						4,598
		Futures options									45,500		15		4
		Commercial mortgage loan commitments			2,042		16		10		673		20		11
			Subtotal	$	26,195	$	85	$	59	$	53,054	$	58	$	70
	Credit contracts:
		Credit default swaps			95						95
			Subtotal	$	26,290	$	85	$	59	$	53,149	$	58	$	70
Derivatives used for customer-related activities:
	Interest rate contracts:
		Swaps		$	146,008	$	2,632	$	2,559	$	134,408	$	2,540	$	2,445
		Caps/floors - Sold			4,846				16		4,789				11
		Caps/floors - Purchased			6,339		34				5,519		37
		Swaptions			3,361		62		12		2,354		49		51
		Futures (c)			3,112						1,856
		Mortgage-backed securities commitments			2,137		3		3		1,515		4		3
			Subtotal	$	165,803	$	2,731	$	2,590	$	150,441	$	2,630	$	2,510
	Foreign exchange contracts				12,547		223		240		14,316		192		172
	Credit contracts:
		Risk participation agreements			5,124		2		4		4,777		2		4
			Subtotal	$	183,474	$	2,956	$	2,834	$	169,534	$	2,824	$	2,686
Derivatives used for other risk management activities:
	Interest rate contracts:
		Swaps		$	225					$	511
		Futures (c)			533						838
		Mortgage-backed securities commitments			75	$	1
			Subtotal	$	833	$	1			$	1,349
	Foreign exchange contracts				2,661		85	$	1		8
	Credit contracts:
		Credit default swaps			15
	Other contracts (d)				1,881				510		1,340			$	422
			Subtotal	$	5,390	$	86	$	511	$	2,697			$	422
Total derivatives not designated as hedging instruments				$	291,256	$	3,973	$	3,841	$	345,059	$	3,604	$	3,570
(a)		Included in Other assets on our Consolidated Balance Sheet.
(b)		Included in Other liabilities on our Consolidated Balance Sheet.
(c)		Futures contracts settle in cash daily and, therefore, no derivative asset or derivative liability is recognized on our Consolidated Balance Sheet.
(d)		Includes PNC's obligation to fund a portion of certain BlackRock LTIP programs and the swaps entered into in connection with sales of a portion of Visa Class B common shares. Refer to Note 7 Fair Value for additional information on the Visa swaps.

Our residential mortgage banking activities consist of originating, selling and servicing mortgage loans. Residential mortgage loans that will be sold in the secondary market, and the related loan commitments, which are considered derivatives, are accounted for at fair value. Changes in the fair value of the loans and commitments due to interest rate risk are hedged with forward contracts to sell mortgage-backed securities, as well as U.S. Treasury and Eurodollar futures and options. Gains and losses on the loans and commitments held for sale and the derivatives used to economically hedge them are included in Residential mortgage noninterest income on the Consolidated Income Statement.

We typically retain the servicing rights related to residential mortgage loans that we sell. Residential mortgage servicing rights are accounted for at fair value with changes in fair value influenced primarily by changes in interest rates. Derivatives used to hedge the fair value of residential mortgage servicing rights include interest rate futures, swaps, options, and forward contracts to purchase mortgage-backed securities. Gains and losses on residential mortgage servicing rights and the related derivatives used for hedging are included in Residential mortgage noninterest income.

Commercial mortgage loans held for sale and the related loan commitments, which are considered derivatives, are accounted for at fair value. Derivatives used to economically hedge these loans and commitments from changes in fair value due to interest rate risk and credit risk include forward loan sale contracts, interest rate swaps, and credit default swaps. Gains and losses on the commitments, loans and derivatives are included in Other noninterest income. Derivatives used to economically hedge the change in value of commercial mortgage servicing rights include interest rate futures, swaps and options. Gains or losses on these derivatives are included in Corporate services noninterest income.

The residential and commercial mortgage loan commitments associated with loans to be sold which are accounted for as derivatives are valued based on the estimated fair value of the underlying loan and the probability that the loan will fund within the terms of the commitment. The fair value also takes into account the fair value of the embedded servicing right.

We offer derivatives to our customers in connection with their risk management needs. These derivatives primarily consist of interest rate swaps, interest rate caps, floors, swaptions and foreign exchange contracts. We primarily manage our market risk exposure from customer transactions by entering into a variety of hedging transactions with third-party dealers. Gains and losses on customer-related derivatives are included in Other noninterest income.

Included in the customer, mortgage banking risk management, and other risk management portfolios are written interest-rate caps and floors entered into with customers and for risk management purposes. We receive an upfront premium from the counterparty and are obligated to make payments to the counterparty if the underlying market interest rate rises above or falls below a certain level designated in the contract. Our ultimate obligation under written options is based on future market conditions.

The derivatives portfolio also includes derivatives used for other risk management activities. These derivatives are entered into based on stated risk management objectives and include credit default swaps (CDSs) used to mitigate the risk of economic loss on a portion of our loan exposure. We enter into credit default swaps under which we buy loss protection from or sell loss protection to a counterparty for the occurrence of a credit event related to a referenced entity or index. The fair values of these derivatives typically are based on related credit spreads. Gains and losses on the derivatives entered into for other risk management are included in Other noninterest income. CDSs are included in these derivative tables: Tables 129, 130, 131, 132 and 133.

Further detail regarding the gains (losses) on derivatives not designated in hedging relationships is presented in the following table:

Table 130: Gains (Losses) on Derivatives Not Designated As Hedging Instruments under GAAP
			Year ended
			December 31
In millions				2014		2013		2012
Derivatives used for residential mortgage banking activities:
Residential mortgage servicing
	Interest rate contracts		$	240	$	(223)	$	269
Loan sales
	Interest rate contracts			(3)		286		127
		Gains (losses) included in residential mortgage banking activities (a)	$	237	$	63	$	396
Derivatives used for commercial mortgage banking activities:
	Interest rate contracts (b) (c)		$	82	$	12	$	35
	Credit contracts (c)			(1)		(2)		(3)
		Gains (losses) from commercial mortgage banking activities	$	81	$	10	$	32
Derivatives used for customer-related activities:
	Interest rate contracts		$	41	$	149	$	106
	Foreign exchange contracts			47		80		83
	Equity contracts					(3)		(4)
	Credit contracts			(1)		(1)		(3)
		Gains (losses) from customer-related activities (c)	$	87	$	225	$	182
Derivatives used for other risk management activities:
	Interest rate contracts		$	(19)	$	3	$	(11)
	Foreign exchange contracts			188		2		(2)
	Credit contracts							(1)
	Other contracts (d)			(134)		(168)		(94)
		Gains (losses) from other risk management activities (c)	$	35	$	(163)	$	(108)
Total gains (losses) from derivatives not designated as hedging instruments			$	440	$	135	$	502
(a)		Included in Residential mortgage noninterest income.
(b)		Included in Corporate services noninterest income.
(c)		Included in Other noninterest income.
(d)		Includes BlackRock LTIP funding obligation and the swaps entered into in connection with sales of a portion of Visa Class B common shares.

Credit Derivatives

We enter into credit derivatives, specifically credit default swaps and risk participation agreements, as part of our commercial mortgage banking hedging activities and for customer and other risk management purposes. The credit derivative underlying is based on the credit risk of a specific entity, entities, or an index. Detail regarding credit default swaps purchased and risk participations sold follows.

Table 131: Credit Default Swaps (a)
		December 31, 2014			December 31, 2013
				Weighted-			Weighted-
				Average			Average
				Remaining			Remaining
		Notional		Maturity	Notional		Maturity
Dollars in millions		Amount		In Years	Amount		In Years
Credit Default Swaps – Purchased (b)
Single name		$	50	5.7	$	35	7.3
Index traded			60	34.2		60	35.2
Total		$	110	21.3	$	95	24.9
(a)	There were no credit default swaps sold as of December 31, 2014 and December 31, 2013.
(b)	The fair value of credit default swaps purchased was less than $1 million as of December 31, 2014 and December 31, 2013.

The notional amount of these credit default swaps by credit rating is presented in the following table:

Table 132: Credit Ratings of Credit Default Swaps (a)
In millions		December 31, 2014		December 31, 2013
Credit Default Swaps – Purchased
Investment grade (b)		$	95	$	95
Subinvestment grade (c)			15
Total		$	110	$	95
(a)	There were no credit default swaps sold as of December 31, 2014 and December 31, 2013.
(b)	Investment grade with a rating of BBB-/Baa3 or above based on published rating agency information.
(c)	There were no subinvestment grade credit default swaps purchased as of December 31, 2013. Subinvestment grade represents a rating below BBB-/Baa3 based on published rating agency information.

The referenced/underlying assets for these credit default swaps are presented in the following table:

Table 133: Referenced/Underlying Assets of Credit Default Swaps
	December 31, 2014		December 31, 2013
Corporate debt		45%	37%
Commercial mortgage-backed securities		55%	63%

Risk Participation Agreements

We also periodically enter into risk participation agreements to share some of the credit exposure with other counterparties related to interest rate derivative contracts or to take on credit exposure to generate revenue. We will make/receive payments under these agreements if a customer defaults on its obligation to perform under certain derivative swap contracts. Risk participation agreements purchased and sold are included in these derivative tables: Tables 129, 130, 134 and 135.

Further detail regarding the notional amount, fair value and weighted-average remaining maturities in years for risk participation agreements sold is presented in the following table:

Table 134: Risk Participation Agreements Sold
		December 31, 2014					December 31, 2013
					Weighted-					Weighted-
					Average					Average
					Remaining					Remaining
	Notional		Fair		Maturity	Notional		Fair		Maturity
Dollars in millions	Amount		Value		In Years	Amount		Value		In Years
Risk Participation Agreements Sold	$	2,796	$	(4)	5.4	$	2,770	$	(4)	6.1

Based on our internal risk rating process of the underlying third party customers referenced in the swap contracts, the percentages of the exposure amount of risk participation agreements sold by internal credit rating follow:

Table 135: Internal Credit Ratings of Risk Participation Agreements Sold
		December 31, 2014		December 31, 2013
Pass (a)		100	%	98	%
Below pass (b)		0	%	2	%
(a)	Indicates the expected risk of default is currently low.
(b)	Indicates a higher degree of risk of default.

We have sold risk participation agreements with terms ranging from less than 1 year to 22 years. We will be required to make payments under these agreements if a customer defaults on its obligation to perform under certain derivative swap contracts with third parties. Assuming all underlying third party customers referenced in the swap contracts defaulted at December 31,2014, the exposure from these agreements would be $124million based on the fair value of the underlying swaps, compared with $77million at December 31, 2013.

Offsetting, Counterparty Credit Risk, and Contingent Features

We, generally, utilize a net presentation on the Consolidated Balance Sheet for those derivative financial instruments entered into with counterparties under legally enforceable master netting agreements. The master netting agreements reduce credit risk by permitting the closeout netting of various types of derivative instruments with the same counterparty upon the occurrence of an event of default. The master netting agreement also may require the exchange of cash or marketable securities to collateralize either party’s net position. In certain cases, minimum thresholds must be exceeded before any collateral is exchanged. Collateral is typically exchanged daily based on the net fair value of the positions with the counterparty as of the preceding day. Any cash collateral exchanged with counterparties under these master netting agreements is also netted against the applicable derivative fair values on the Consolidated Balance Sheet. However, the fair value of any securities held or pledged is not included in the net presentation on the balance sheet. In order for an arrangement to be eligible for netting under GAAP (ASC 210-20), we must obtain the requisite assurance that the offsetting rights included in the master netting agreement would be legally enforceable in the event of bankruptcy, insolvency, or a similar proceeding of such third party. Enforceability is evidenced by obtaining a legal opinion that supports, with sufficient confidence, the enforceability of the master netting agreement in bankruptcy.

The following derivative Table 136shows the impact legally enforceable master netting agreements had on our derivative assets and derivative liabilities as of December 31,2014 and December 31, 2013. The table also includes the fair value of any securities collateral held or pledged under legally enforceable master netting agreements. Cash and securities collateral amounts are included in the table only to the extent of the related net derivative fair values.

Refer to Note 22Commitments and Guarantees for additional information related to resale and repurchase agreements offsetting.

Table 136: Derivative Assets and Liabilities Offsetting
					Amounts							Securities
			Gross		Offset on the				Net			Collateral
			Fair Value		Consolidated Balance Sheet				Fair Value			Held Under
December 31, 2014			Derivative		Fair Value		Cash		Derivative			Master Netting		Net
In millions			Assets		Offset Amount		Collateral		Assets			Agreements		Amounts
Derivative assets
	Interest rate contracts	$	4,918	$	1,981	$	458	$	2,479		$	143	$	2,336
	Foreign exchange contracts		314		159		47		108			1		107
	Credit contracts		2		1		1
	Total derivative assets (a) (b)	$	5,234	$	2,141	$	506	$	2,587	(c)	$	144	$	2,443
					Amounts							Securities
			Gross		Offset on the				Net			Collateral
			Fair Value		Consolidated Balance Sheet				Fair Value			Pledged Under
December 31, 2014			Derivative		Fair Value		Cash		Derivative			Master Netting		Net
In millions			Liabilities		Offset Amount		Collateral		Liabilities			Agreements		Amounts
Derivative liabilities
	Interest rate contracts	$	3,272	$	2,057	$	483	$	732				$	732
	Foreign exchange contracts		241		80		20		141					141
	Credit contracts		4		4
	Other contracts		510						510					510
	Total derivative liabilities (a) (b)	$	4,027	$	2,141	$	503	$	1,383	(d)			$	1,383
					Amounts							Securities
			Gross		Offset on the				Net			Collateral
			Fair Value		Consolidated Balance Sheet				Fair Value			Held Under
December 31, 2013			Derivative		Fair Value		Cash		Derivative			Master Netting		Net
In millions			Assets		Offset Amount		Collateral		Assets			Agreements		Amounts
Derivative assets
	Interest rate contracts	$	4,599	$	2,468	$	556	$	1,575		$	115	$	1,460
	Foreign exchange contracts		192		64		9		119					119
	Credit contracts		2		1				1					1
	Total derivative assets (a) (b)	$	4,793	$	2,533	$	565	$	1,695	(c)	$	115	$	1,580
					Amounts							Securities
			Gross		Offset on the				Net			Collateral
			Fair Value		Consolidated Balance Sheet				Fair Value			Pledged Under
December 31, 2013			Derivative		Fair Value		Cash		Derivative			Master Netting		Net
In millions			Liabilities		Offset Amount		Collateral		Liabilities			Agreements		Amounts
Derivative liabilities
	Interest rate contracts	$	3,326	$	2,447	$	473	$	406				$	406
	Foreign exchange contracts		182		83		23		76					76
	Credit contracts		4		3		1
	Other contracts		422						422					422
	Total derivative liabilities (a) (b)	$	3,934	$	2,533	$	497	$	904	(d)			$	904
(a)	There were no derivative assets or derivative liabilities equity contracts as of December 31, 2014 and December 31, 2013.
(b)	Included derivative assets and derivative liabilities as of December 31, 2014 totaling $807 million and $657 million, respectively, related to interest rate contracts executed bilaterally with counterparties in the U.S. over-the-counter market and novated to and cleared through a central clearing house. The comparable amounts as of December 31, 2013 totaled $331 million and $224 million, respectively. Derivative assets and liabilities as of December 31, 2014 and December 31, 2013 related to exchange-traded interest rate contracts were not material. As of December 31, 2014 and December 31, 2013, these contracts were not subject to offsetting. The remaining gross and net derivative assets and liabilities relate to contracts executed bilaterally with counterparties that are not settled through an organized exchange or central clearing house.
(c)	Represents the net amount of derivative assets included in Other assets on our Consolidated Balance Sheet.
(d)	Represents the net amount of derivative liabilities included in Other liabilities on our Consolidated Balance Sheet.

In addition to using master netting and related collateral agreements to reduce credit risk associated with derivative instruments, we also seek to manage credit risk by evaluating credit ratings of counterparties, by taking collateral and by using internal credit analysis, limits, and monitoring procedures. Collateral may also be exchanged under certain derivative agreements that are not considered master netting agreements.

At December 31,2014, we held cash, U.S. government securities and mortgage-backed securities totaling $815 million under master netting and other collateral agreements to collateralize net derivative assets due from counterparties, and we have pledged cash totaling $514 millionunder these agreements to collateralize net derivative liabilities owed to counterparties. These totals may differ from the amounts presented in the preceding offsetting table because they may include collateral exchanged under an agreement that does not qualify as a master netting agreement or because the total amount of collateral held or pledged exceeds the net derivative fair value with the counterparty as of the balance sheet date due to timing or other factors. To the extent not netted against the derivative fair value under a master netting agreement, the receivable for cash pledged is included in Other assets and the obligation for cash held is included in Other borrowed funds on our Consolidated Balance Sheet. Securities held from counterparties are not recognized on our balance sheet. Likewise securities we have pledged to counterparties remain on our balance sheet.

Certain of the master netting agreements and certain other derivative agreements also contain provisions that require PNC’s debt to maintain an investment grade credit rating from each of the major credit rating agencies. If PNC’s debt ratings were to fall below investment grade, we would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position on December 31,2014was $681 million for which PNC had posted collateral of $508 million in the normal course of business. The maximum additional amount of collateral PNC would have been required to post if the credit-risk-related contingent features underlying these agreements had been triggered on December 31,2014 would be $173 million.