Loans, Lending Commitments and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2019

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans, Lending Commitments and Allowance for Credit Losses

Loans, Lending Commitments and Allowance for Credit Losses

Loans by Type

	At September 30, 2019
$ in millions	Loans Held for Investment			Loans Held for Sale		Total Loans
Corporate	$	45,117		$	13,525	$	58,642
Consumer	30,010			—		30,010
Residential real estate	29,184			17		29,201
Commercial real estate	6,801			1,165		7,966
Total loans, gross	111,112			14,707		125,819
Allowance for loan losses	(297		)	—		(297		)
Total loans, net	$	110,815		$	14,707	$	125,522
Fixed rate loans, net						$	20,233
Floating or adjustable rate loans, net						105,289
Loans to non-U.S. borrowers, net						20,722

	At December 31, 2018
$ in millions	Loans Held for Investment			Loans Held for Sale		Total Loans
Corporate	$	36,909		$	13,886	$	50,795
Consumer	27,868			—		27,868
Residential real estate	27,466			22		27,488
Commercial real estate1	7,810			1,856		9,666
Total loans, gross	100,053			15,764		115,817
Allowance for loan losses	(238		)	—		(238		)
Total loans, net	$	99,815		$	15,764	$	115,579
Fixed rate loans, net						$	15,632
Floating or adjustable rate loans, net						99,947
Loans to non-U.S. borrowers, net						17,568

1. Beginning in 2019, loans previously referred to as Wholesale real estate are referred to as Commercial real estate.

Loans Held for Investment before Allowance by Credit Quality

	At September 30, 2019
$ in millions	Corporate		Consumer		Residential Real Estate		Commercial Real Estate		Total
Pass	$	44,152	$	30,005	$	29,051	$	6,618	$	109,826
Special mention	373		—		27		80		480
Substandard	592		5		106		103		806
Doubtful	—		—		—		—		—
Loss	—		—		—		—		—
Total	$	45,117	$	30,010	$	29,184	$	6,801	$	111,112

	At December 31, 2018
$ in millions	Corporate		Consumer		Residential Real Estate		Commercial Real Estate		Total
Pass	$	36,217	$	27,863	$	27,387	$	7,378	$	98,845
Special mention	492		5		—		312		809
Substandard	200		—		79		120		399
Doubtful	—		—		—		—		—
Loss	—		—		—		—		—
Total	$	36,909	$	27,868	$	27,466	$	7,810	$	100,053

Impaired Loans and Lending Commitments before Allowance

	At September 30, 2019
$ in millions	Corporate		Consumer		Residential Real Estate		Total
Loans
With allowance	$	232	$	—	$	—	$	232
Without allowance1	28		5		92		125
Total impaired loans	$	260	$	5	$	92	$	357
UPB	267		5		94		366
Lending commitments
With allowance	$	5	$	—	$	—	$	5
Without allowance1	37		—		—		37
Total impaired lending commitments	$	42	$	—	$	—	$	42

	At December 31, 2018
$ in millions	Corporate		Consumer		Residential Real  Estate		Total
Loans
With allowance	$	24	$	—	$	—	$	24
Without allowance1	32		—		69		101
Total impaired loans	$	56	$	—	$	69	$	125
UPB	63		—		70		133
Lending commitments
With allowance	$	19	$	—	$	—	$	19
Without allowance1	34		—		—		34
Total impaired lending commitments	$	53	$	—	$	—	$	53

1. No allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows or value of the collateral equaled or exceeded the carrying value.

Loans and lending commitments in the previous table have been evaluated for a specific allowance. All remaining loans and lending commitments are assessed under the inherent allowance methodology.

Impaired Loans and Total Allowance by Region

	At September 30, 2019
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	357	$	—	$	—	$	357
Total Allowance for loan losses	227		64		6		297

	At December 31, 2018
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	125	$	—	$	—	$	125
Total Allowance for loan losses	193		42		3		238

Troubled Debt Restructurings

$ in millions	At September 30, 2019		At December 31, 2018
Loans	$	46	$	38
Lending commitments	49		45
Allowance for loan losses and lending commitments	5		4

Impaired loans and lending commitments classified as held for investment within corporate loans include TDRs. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants and payment extensions.

Allowance for Loan Losses Rollforward

$ in millions	Corporate			Consumer		Residential Real Estate			Commercial Real Estate			Total
December 31, 2018	$	144		$	7	$	20		$	67		$	238
Gross charge-offs	—			—		(1		)	—			(1		)
Provision (release)1	69			—		5			(6		)	68
Other	(7		)	—		—			(1		)	(8		)
September 30, 2019	$	206		$	7	$	24		$	60		$	297
Inherent	$	188		$	7	$	24		$	60		$	279
Specific	18			—		—			—			18

$ in millions	Corporate			Consumer		Residential Real Estate			Commercial Real Estate			Total
December 31, 2017	$	126		$	4	$	24		$	70		$	224
Gross charge-offs	(4		)	—		—			—			(4		)
Recoveries2	54			—		—			—			54
Net recoveries (charge-offs)	50			—		—			—			50
Provision (release)1,2	(39		)	1		(4		)	9			(33		)
Other	(2		)	—		—			(8		)	(10		)
September 30, 2018	$	135		$	5	$	20		$	71		$	231
Inherent	$	130		$	5	$	20		$	71		$	226
Specific	5			—		—			—			5

1. The Firm recorded a provision for loan losses of $34 million in the current quarter and $1 million in the prior year quarter.

2. The prior year period release was primarily due to the recovery of a previously charged off energy industry related loan.

Allowance for Lending Commitments Rollforward

$ in millions	Corporate			Consumer			Residential Real Estate		Commercial Real Estate		Total
December 31, 2018	$	198		$	2		$	—	$	3	$	203
Provision (release)1	34			—			—		2		36
Other	(4		)	(1		)	—		—		(5		)
September 30, 2019	$	228		$	1		$	—	$	5	$	234
Inherent	$	224		$	1		$	—	$	5	$	230
Specific	4			—			—		—		4

$ in millions	Corporate			Consumer		Residential Real Estate		Commercial Real Estate			Total
December 31, 2017	$	194		$	1	$	—	$	3		$	198
Provision (release)1	5			—		—		1			6
Other	(2		)	—		—		(1		)	(3		)
September 30, 2018	$	197		$	1	$	—	$	3		$	201
Inherent	$	190		$	1	$	—	$	3		$	194
Specific	7			—		—		—			7

1. The Firm recorded a provision for lending commitments of $16 million in the current quarter and $1 million in the prior year quarter.

For a further discussion of the Firm’s loans, including loan types and categories, as well as the Firm’s allowance methodology, refer to Notes 2 and 7 to the financial statements in the 2018 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value. See Note 11 for details of current commitments to lend in the future.

Employee Loans

$ in millions	At September 30, 2019			At December 31, 2018
Balance	$	2,990		$	3,415
Allowance for loan losses	(61		)	(63		)
Balance, net	$	2,929		$	3,352
Remaining repayment term, weighted average in years	4.7			4.3

Employee loans are granted in conjunction with a program established primarily to recruit certain Wealth Management representatives, are full recourse and generally require periodic repayments. These loans are recorded in Customer and other receivables in the balance sheets. The Firm establishes an allowance for loan amounts it does not consider recoverable, and the related provision is recorded in Compensation and benefits expense.