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Loans and Leases (Tables)
 9 Months Ended
Sep. 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)
September 30, 2019
 
December 31, 2018
Domestic(1):
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
$
13,747

 
$
15,050

Senior secured bank loans
3,145

 
3,490

Loans to municipalities
762

 
902

Other
28

 
37

Commercial real estate
1,346

 
874

Total domestic
19,028

 
20,353

Foreign(1):
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
6,868

 
4,505

Senior secured bank loans
1,113

 
931

Total foreign
7,981

 
5,436

Total loans and leases(2)
27,009

 
25,789

Allowance for loan and lease losses
(71
)
 
(67
)
Loans and leases, net of allowance
$
26,938

 
$
25,722

 
 
 
 
(1) Domestic and foreign categorization is based on the borrower’s country of domicile.
(2) Loans to investment funds Include $6.14 billion and $5.44 billion of overdrafts as of September 30, 2019 and December 31, 2018, respectively.
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:
September 30, 2019
Commercial and Financial
 
Commercial Real Estate
 
Total Loans and Leases
(In millions)
Investment grade(1)
$
20,607

 
$
1,346

 
$
21,953

Speculative(2)
5,017

 
—

 
5,017

Special mention(3)
25

 
—

 
25

Substandard(4)
14

 
—

 
14

Total
$
25,663

 
$
1,346

 
$
27,009

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(4)
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) Special mention loans consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects.
(4) 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 September 30,
(In millions)
2019
 
2018
Allowance for loan and lease losses:
 
 
Beginning balance
$
72

 
$
55

Provision for loan and lease losses(1)
2


5

Charge-offs(1)
(2
)
 
—

Other(2)
(1
)

—

Ending balance
$
71

 
$
60

 
 
 
 
 
Nine Months Ended September 30,
(In millions)
2019
 
2018
Allowance for loan and lease losses:
 
 
Beginning balance
$
67

 
$
54

Provision for loan and lease losses(1)
7

 
7

Charge-offs(1)
(2
)
 
(1
)
Other(2)

(1
)
 
—

Ending balance
$
71

 
$
60

 
 
 
(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.