Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2021

Forecasted Key Macroeconomic Variables Used in Estimating Lifetime ECL

The following table presents the forecasted key macroeconomic variables in our Central scenarios used for estimating lifetime ECL at December 31, 2021 and December 31, 2020:


	For the Quarter Ended
	June 30, 2022		December 31, 2022
Unemployment rate (quarterly average):
Forecast at December 31, 2021	4.3	%	4.0	%

Forecast at December 31, 2020	5.9		5.4
GDP growth rate (year-over-year):
Forecast at December 31, 2021	4.1		2.8

Forecast at December 31, 2020	3.1		1.8

Summary of Allowance for Credit Losses and Liability for Off-balance Sheet Credit Exposures

The following table summarizes our allowance for credit losses and the liability for off-balance sheet credit exposures:


At December 31,	2021		2020
	(in millions)
Allowance for credit losses:
Loans	$	447	$	1,015
Securities held-to-maturity(1)	1		2
Other financial assets measured at amortized cost(2)	1		2
Securities available-for-sale(1)	1		1
Total allowance for credit losses	$	450	$	1,020

Liability for off-balance sheet credit exposures	$	103	$	237

(1)See Note 6, "Securities," for additional information regarding the allowance for credit losses associated with our security portfolios.

(2)Primarily includes accrued interest receivables and customer acceptances.

Summary of Changes in the Allowance for Credit Losses by Product Line

The following table summarizes the changes in the allowance for credit losses on loans by product or line of business during the years ended December 31, 2021, 2020 and 2019:


	Commercial Loans								Consumer Loans
	Real Estate, including Construction		Business and Corporate Banking		Global Banking		Other Comm'l		Residential Mortgages		Home Equity Mortgages		Credit Cards		Other Consumer		Total Loans
	(in millions)


















Year Ended December 31, 2021
Allowance for credit losses – beginning of period	$	145	$	375	$	287	$	7	$	(9)	$	22	$	161	$	27	$	1,015


Provision charged (credited) to income(1)	(72)		(107)		(174)		(3)		21		(18)		(66)		(18)		(437)
Charge-offs(1)	—		(29)		(13)		—		(19)		(5)		(89)		(10)		(165)
Recoveries	—		4		—		—		15		6		8		1		34
Net (charge-offs) recoveries	—		(25)		(13)		—		(4)		1		(81)		(9)		(131)

Allowance for credit losses – end of period	$	73	$	243	$	100	$	4	$	8	$	5	$	14	$	—	$	447

Year Ended December 31, 2020
Allowance for credit losses – beginning of period	$	153	$	239	$	106	$	9	$	12	$	6	$	105	$	7	$	637
Cumulative effect adjustment to initially apply new accounting guidance for measuring credit losses(2)	(112)		(60)		51		(5)		(86)		7		32		3		(170)
Allowance for credit losses – beginning of period, adjusted	41		179		157		4		(74)		13		137		10		467
Provision charged (credited) to income	116		274		149		2		55		6		107		27		736
Charge-offs	(12)		(90)		(20)		—		(2)		(3)		(90)		(11)		(228)
Recoveries	—		12		1		1		12		6		7		1		40
Net (charge-offs) recoveries	(12)		(78)		(19)		1		10		3		(83)		(10)		(188)

Allowance for credit losses – end of period	$	145	$	375	$	287	$	7	$	(9)	$	22	$	161	$	27	$	1,015










Year Ended December 31, 2019
Allowance for credit losses – beginning of period	$	116	$	219	$	108	$	15	$	13	$	7	$	58	$	5	$	541
Provision charged (credited) to income	37		62		1		(6)		(3)		(2)		101		5		195
Charge-offs	—		(45)		(3)		—		(8)		(4)		(60)		(5)		(125)
Recoveries	—		3		—		—		10		5		6		2		26
Net (charge-offs) recoveries	—		(42)		(3)		—		2		1		(54)		(3)		$	(99)

Allowance for credit losses – end of period	$	153	$	239	$	106	$	9	$	12	$	6	$	105	$	7	$	637

(1)For loans that are transferred to held for sale, the existing allowance for credit losses at the time of transfer is recognized as a charge-off to the extent fair value is less than amortized cost and attributable to credit. Any remaining allowance for credit losses is released to the provision for credit losses.

During the second quarter of 2021, we made the decision to exit our mass market retail banking business as well as our remaining retail credit card portfolio which resulted in the transfer of certain loans to held for sale. As a result of transferring these loans to held for sale, we recognized $56 million of the existing allowance for credit losses on consumer loans as charge-offs, primarily related to non-performing credit cards, and released $100 million of the existing allowance for credit losses on consumer loans as reductions to the provision for credit losses, primarily related to credit cards. The existing commercial allowance for credit losses on the retail business banking loan portfolio transferred to held for sale was not material. See Note 4, "Branch Assets and Liabilities Held for Sale." During the fourth quarter of 2021, a portfolio of Premier credit cards was transferred back to held for investment which resulted in increases to the allowance for credit losses and provision for credit losses of $14 million.

During the third quarter of 2021, we transferred certain commercial real estate loans to held for sale and, as a result, we released $24 million of the existing allowance for credit losses as a reduction to the provision for credit losses.

During the fourth quarter of 2021, we also transferred certain non-performing mortgage loans and government-backed mortgage loans to held for sale. As a result, we recognized $4 million of the existing allowance for credit losses as charge-offs and released $22 million of the existing allowance for expected recoveries on these loans as an increase to the provision for credit losses.

(2)Reflects the adoption of new accounting guidance in 2020 as discussed above. In addition, see Note 2, "Summary of Significant Accounting Policies and New Accounting Pronouncements," for further discussion.

Summary of Changes in the Liability for Off-balance Sheet Credit Exposures

The following table summarizes the changes in the liability for off-balance sheet credit exposures during the years ended December 31, 2021, 2020 and 2019:



Year Ended December 31,	2021		2020		2019
	(in millions)
Balance at beginning of period	$	237	$	104	$	96
Cumulative effect adjustment to initially apply new accounting guidance for measuring credit losses(1)	—		54		—
Balance at beginning of period, adjusted	237		158		96
Provision charged (credited) to income	(134)		79		8
Balance at end of period	$	103	$	237	$	104

(1)Reflects the adoption of new accounting guidance in 2020 as discussed above. In addition, see Note 2, "Summary of Significant Accounting Policies and New Accounting Pronouncements," for further discussion.

Summary of Accrued Interest Receivables

The following table summarizes accrued interest receivables associated with financial assets carried at amortized cost and securities available-for-sale along with the related allowance for credit losses, which are reported net in other assets on the consolidated balance sheet. These accrued interest receivables are excluded from the amortized cost basis disclosures presented elsewhere in these financial statements, including Note 6, "Securities," and Note 7, "Loans."


At December 31,	2021		2020
	(in millions)
Accrued interest receivables:
Loans	$	109	$	140
Securities held-to-maturity	13		23
Other financial assets measured at amortized cost	1		1
Securities available-for-sale	82		100
Total accrued interest receivables	205		264
Allowance for credit losses	1		2
Accrued interest receivables, net	$	204	$	262