Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2019

Loans and Leases Receivable Disclosure [Abstract]

Net Loans

The following table presents our recorded investment in loans and leases, by segment, as of the dates indicated:

(In millions)	June 30, 2019			December 31, 2018
Domestic:
Commercial and financial:
Loans to investment funds	$	13,823		$	15,050
Senior secured bank loans	3,456			3,490
Loans to municipalities	575			902
Other	32			37
Commercial real estate	1,164			874
Total domestic	19,050			20,353
Non-U.S.:
Commercial and financial:
Loans to investment funds	5,265			4,505
Senior secured bank loans	1,106			931
Total non-U.S.	6,371			5,436
Total loans and leases	25,421			25,789
Allowance for loan and lease losses	(72		)	(67		)
Loans and leases, net of allowance	$	25,349		$	25,722

Recorded Investment in Each Class of Total Loans and Leases by Credit Quality Indicator

The following tables present our recorded investment in each class of loans and leases by credit

quality indicator as of the dates indicated:

June 30, 2019	Commercial and Financial		Commercial Real Estate		Total Loans and Leases
(In millions)
Investment grade(1)	$	18,978	$	1,164	$	20,142
Speculative(2)	5,264		—		5,264
Substandard(3)	15		—		15
Total	$	24,257	$	1,164	$	25,421

December 31, 2018	Commercial and Financial		Commercial Real Estate		Total Loans and Leases
(In millions)
Investment grade(1)	$	19,599	$	874	$	20,473
Speculative(2)	5,308		—		5,308
Substandard(3)	8		—		8
Total	$	24,915	$	874	$	25,789

⁽¹⁾ Investment-grade loans and leases consist of counterparties with strong credit quality and low expected credit risk and probability of default. Ratings apply to counterparties with a strong capacity to support the timely repayment of any financial commitment.

⁽²⁾ Speculative loans and leases consist of counterparties that face ongoing uncertainties or exposure to business, financial, or economic downturns. However, these counterparties may have financial flexibility or access to financial alternatives, which allow for financial commitments to be met.

⁽³⁾ Substandard loans and leases consist of counterparties with well-defined weaknesses that jeopardize repayment with the possibility we will sustain some loss.

Schedule of Activity in the Allowance for Loan Losses

The following table presents activity in the ALLL for the periods indicated:

	Three Months Ended June 30,
(In millions)	2019		2018
Allowance for loan and lease losses:
Beginning balance	$	70	$	54
Provision for loan and lease losses(1)	1		2
Charge-offs(1)	—		(1		)
Other(2)	1		—
Ending balance	$	72	$	55
	Six Months Ended June 30,
(In millions)	2019		2018
Allowance for loan and lease losses:
Beginning balance	$	67	$	54
Provision for loan and lease losses(1)	5		2
Charge-offs(1)	—		(1		)
Ending balance	$	72	$	55

⁽¹⁾ The provisions and charge-offs for loans and leases were primarily attributable to exposure to purchased senior secured loans to non-investment grade loans.

⁽²⁾ Consists primarily of FX translation.