Related Party Transactions

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

MUAH is a financial holding company, bank holding company and intermediate holding company whose principal subsidiaries are MUFG Union Bank, N.A. and MUFG Securities Americas Inc. (formerly Mitsubishi UFJ Securities (USA), Inc.). It is owned by BTMU and MUFG. BTMU is a wholly-owned subsidiary of MUFG.

On July 1, 2016, in accordance with the requirements of the U.S. Federal Reserve Board’s final rules for Enhanced Prudential standards, MUAH was designated the U.S. Intermediate Holding Company of MUFG.

The Company provides various business, banking, financial, administrative and support services, and facilities for BTMU in connection with the operation and administration of all of BTMU's business in the U.S. (including BTMU's U.S. branches). The Bank and BTMU participate in a master services agreement whereby the Bank earns fee income in exchange for services and facilities provided.

In addition to the above, the Company conducts transactions with affiliates which include BTMU, MUFG and other entities which are directly or indirectly owned by MUFG. The transactions include capital market transactions, facilitating securities transactions, secured financing transactions, advisory services, clearing and operational support. Under services level agreements the Company provides services to and receives services from various affiliates. The Company also has referral agreements with its affiliates and pays referral fees from investment banking revenue earned.

Related party transactions reflect market-based pricing. These transactions are subject to federal and state statutory and regulatory restrictions and limitations.

The tables and discussion below represent the more significant related party balances and income (expenses) generated by related party transactions.

As of March 31, 2017 and December 31, 2016, assets and liabilities with affiliates consisted of the following:

(Dollars in millions)	March 31, 2017		December 31, 2016
Assets:
Cash and cash equivalents	$	105	$	102
Securities borrowed or purchased under resale agreements	2,386		2,765
Other assets	190		161
Liabilities:
Deposits	$	661	$	623
Securities loaned or sold under repurchase agreements	597		385
Commercial paper and other short-term borrowings	1,196		1,372
Long-term debt	5,966		6,042
Other liabilities	124		63

Revenue and expenses with affiliates for the three months ended March 31, 2017 and 2016 were as follows:

	For the Three Months Ended   March 31,
(Dollars in millions)	2017		2016
Interest Income
Securities borrowed or purchased under resale agreements	$	7	$	6
Interest Expense
Commercial paper and other short-term borrowings	2		6
Long-term debt	28		7
Securities loaned or sold under repurchase agreements	1		—
Noninterest Income
Fees from affiliates	219		212
Other, net	2		—
Noninterest Expense
Other	25		24

At March 31, 2017, the Company had $1.9 billion in uncommitted, unsecured borrowing facilities and $475 million in uncommitted, secured borrowing facilities with affiliates. See Note 6 and Note 7 to these consolidated financial statements for more information on debt due to affiliates.

At March 31, 2017 and December 31, 2016, the Company had derivative contracts with affiliates totaling $1.5 billion and $1.6 billion, respectively, in notional balances, with $76 million and $72 million in net unrealized gains at March 31, 2017 and December 31, 2016, respectively.

An affiliate extends guarantees on certain liabilities arising out of or in connection with agreements with certain counterparties. At March 31, 2017, the guaranteed balance was $1 million. There was no amount guaranteed at December 31, 2016. The guarantee fee was nominal for the three months ended March 31, 2017, and 2016.