Loans

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans

Loans

Loans consisted of the following:

	June 30, 2023		December 31, 2022
	(in millions)
Commercial loans:
Real estate, including construction	$	7,185	$	7,963
Business and corporate banking	16,169		16,075
Global banking(1)	10,127		10,578
Other commercial:
Affiliates(2)	3,067		3,557
Other	3,263		3,644
Total other commercial	6,330		7,201
Total commercial	39,811		41,817
Consumer loans:
Residential mortgages	17,452		16,838
Home equity mortgages	364		370
Credit cards	197		213
Other consumer(3)	121		142
Total consumer	18,134		17,563
Total loans	$	57,945	$	59,380

(1)Represents large multinational firms including globally focused U.S. corporate and financial institutions, U.S. dollar lending to multinational banking clients managed by HSBC on a global basis and complex large business clients supported by Global Banking and Markets relationship managers.

(2)See Note 14, "Related Party Transactions," for additional information regarding loans to HSBC affiliates.

(3)Includes certain student loans that we have elected to designate under the fair value option and are therefore carried at fair value, which totaled $17 million and $20 million at June 30, 2023 and December 31, 2022, respectively. See Note 11, "Fair Value Option," for further details.

Net deferred origination costs totaled $22 million and $14 million at June 30, 2023 and December 31, 2022, respectively. At June 30, 2023 and December 31, 2022, we had a net unamortized discount on our loans of $8 million and $10 million, respectively.

Aging Analysis of Past Due Loans  The following table summarizes the past due status of our loans at June 30, 2023 and December 31, 2022. The aging of past due amounts is determined based on the contractual delinquency status of payments under the loan. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status is affected by customer account management policies and practices such as re-age, which results in the re-setting of the contractual delinquency status to current.

	Past Due				Total Past Due 30 Days or More
	30 - 89 Days		90+ Days				Current(1)		Total Loans
	(in millions)
At June 30, 2023
Commercial loans:
Real estate, including construction	$	168	$	106	$	274	$	6,911	$	7,185
Business and corporate banking	110		3		113		16,056		16,169
Global banking	11		47		58		10,069		10,127
Other commercial	209		—		209		6,121		6,330
Total commercial	498		156		654		39,157		39,811
Consumer loans:
Residential mortgages	160		88		248		17,204		17,452
Home equity mortgages	1		3		4		360		364
Credit cards	2		3		5		192		197
Other consumer	4		2		6		115		121
Total consumer	167		96		263		17,871		18,134
Total loans	$	665	$	252	$	917	$	57,028	$	57,945
At December 31, 2022
Commercial loans:
Real estate, including construction	$	27	$	1	$	28	$	7,935	$	7,963
Business and corporate banking	13		23		36		16,039		16,075
Global banking	—		8		8		10,570		10,578
Other commercial	464		—		464		6,737		7,201
Total commercial	504		32		536		41,281		41,817
Consumer loans:
Residential mortgages	180		105		285		16,553		16,838
Home equity mortgages	2		3		5		365		370
Credit cards	2		2		4		209		213
Other consumer	2		1		3		139		142
Total consumer	186		111		297		17,266		17,563
Total loans	$	690	$	143	$	833	$	58,547	$	59,380

(1)Loans less than 30 days past due are presented as current.

Nonperforming Loans  Nonperforming loans, including nonaccrual loans and accruing loans contractually 90 days or more past due, consisted of the following:

	Nonaccrual Loans		Accruing Loans Contractually Past Due 90 Days or More		Nonaccrual Loans With No Allowance For Credit Losses
	(in millions)
At June 30, 2023
Commercial loans:
Real estate, including construction	$	107	$	—	$	43
Business and corporate banking	145		1		28
Global banking	55		—		53
Other commercial	1		—		1
Total commercial	308		1		125
Consumer loans:
Residential mortgages(1)(2)(3)	204		—		90
Home equity mortgages(1)(2)	11		—		5
Credit cards	—		3		—
Total consumer	215		3		95
Total nonperforming loans	$	523	$	4	$	220
At December 31, 2022
Commercial loans:
Real estate, including construction	$	45	$	—	$	43
Business and corporate banking	116		1		62
Global banking	54		—		40
Total commercial	215		1		145
Consumer loans:
Residential mortgages(1)(2)(3)	213		—		79
Home equity mortgages(1)(2)	7		—		5
Credit cards	—		2		—
Other consumer	—		1		—
Total consumer	220		3		84
Total nonperforming loans	$	435	$	4	$	229

(1)At June 30, 2023 and December 31, 2022, nonaccrual consumer mortgage loans include $120 million and $109 million, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.

(2)Nonaccrual consumer mortgage loans include all loans which are 90 or more days contractually delinquent as well as loans discharged under Chapter 7 bankruptcy and not re-affirmed and second lien loans where the first lien loan that we own or service is 90 or more days contractually delinquent.

(3)Nonaccrual consumer mortgage loans for all periods does not include guaranteed loans purchased from the Government National Mortgage Association. Repayment of these loans is predominantly insured by the Federal Housing Administration and as such, these loans have different risk characteristics from the rest of our consumer loan portfolio.

Interest income that was recorded on nonaccrual loans and included in interest income totaled $2 million and $3 million during the three and six months ended June 30, 2023, respectively, compared with $2 million and $5 million during the three and six months ended June 30, 2022, respectively.

Collateral-Dependent Loans Loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty are considered to be collateral-dependent loans. Collateral can have a significant financial effect in mitigating our exposure to credit risk.

Collateral-dependent residential mortgage loans are carried at the lower of amortized cost or fair value of the collateral less costs to sell, with any excess in the carrying amount of the loan generally charged off at the time foreclosure is initiated or when settlement is reached with the borrower, but not to exceed the end of the month in which the account becomes six months contractually delinquent. Collateral values are based on broker price opinions or appraisals which are updated at least every 180

days less estimated costs to sell. During the quarterly period between updates, real estate price trends are reviewed on a geographic basis and incorporated as necessary. At June 30, 2023 and December 31, 2022, we had collateral-dependent residential mortgage loans totaling $267 million and $249 million, respectively.

For collateral-dependent commercial loans, the allowance for expected credit losses is established on an individual basis ("individually assessed") based on the fair value of the collateral. Various types of collateral are used, including real estate, inventory, equipment, accounts receivable, securities and cash, among others. For commercial real estate loans, collateral values are generally based on appraisals which are updated based on management judgment under the specific circumstances on a case-by-case basis. In situations where an appraisal is not used, borrower-specific factors such as operating results, cash flows and debt service ratios are reviewed along with relevant market data of comparable properties in order to create a 10-year cash flow model to be discounted at appropriate rates to present value. The collateral value for securities is based on their quoted market prices or broker quotes. The collateral value for other financial assets is generally based on appraisals or is estimated using a discounted cash flow analysis. Commercial loan balances are charged off at the time all or a portion of the balance is deemed uncollectible. At June 30, 2023 and December 31, 2022, we had collateral-dependent commercial loans totaling $299 million and $130 million, respectively.

Loan Modifications In conjunction with our loss mitigation activities, we modify certain loans to borrowers experiencing financial difficulty. Modifications may include changes to one or more terms of the loan, including, but not limited to, a change in interest rate, extension of the term, reduction in payment amount and partial forgiveness or deferment of principal, accrued interest or other loan covenants. As a result of adopting new accounting guidance in 2023, beginning January 1, 2023, new loan modifications are no longer required to be evaluated to determine if they should be separately identified and accounted for as troubled debt restructurings ("TDR Loans"). See under the heading "TDR Loans prior to 2023" below for additional information.

The following disclosures provide information about loan payment modifications made to borrowers experiencing financial difficulty in the form of an interest rate reduction, principal forgiveness, a term extension or significant payment deferral, or a combination thereof. Not included are loans with short-term payment modifications (e.g., deferrals of three months or less) and other insignificant modifications, such as covenant waivers and amendments, and deferrals of financial statement and covenant compliance reporting requirements. Commercial loan payment modifications typically involve term extensions. In certain cases, the term extension is coupled with an interest rate increase which is intended to reduce the financial effect of extending the life of the loan. The effects of these interest rate increases are not included in the following disclosures. For consumer loans, payment modifications typically involve payment deferrals or interest rate reductions which lower the amount of interest income we are contractually entitled to receive in future periods. Through lowering the interest rate, we believe we are able to increase the amount of cash flow that will ultimately be collected from the loan, given the borrower's financial condition.

The following table presents information about loan payment modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023 by type of modification, including the period-end carrying value and as a percentage of total loans:

	Interest Rate Reduction		Principal Forgiveness		Term Extension / Significant Payment Deferral		Combination(1)		Total		% of Total Loans
	(dollars are in millions)
Three Months Ended June 30, 2023
Commercial loans:
Real estate, including construction	$	—	$	—	$	235	$	—	$	235	3.3	%
Business and corporate banking	—		—		44		—		44		.3
Global banking	—		—		5		—		5		.0
Total commercial	—		—		284		—		284		.7
Consumer loans:
Residential mortgages(2)	—		—		7		1		8		.0
Total consumer	—		—		7		1		8		.0
Total	$	—	$	—	$	291	$	1	$	292	.5

	Interest Rate Reduction		Principal Forgiveness		Term Extension / Significant Payment Deferral		Combination(1)		Total		% of Total Loans
	(dollars are in millions)
Six Months Ended June 30, 2023
Commercial loans:
Real estate, including construction	$	—	$	—	$	235	$	—	$	235	3.3	%
Business and corporate banking	—		—		97		12		109		.7
Global banking	—		—		5		—		5		.0
Total commercial	—		—		337		12		349		.9
Consumer loans:
Residential mortgages(2)	—		—		7		1		8		.0
Total consumer	—		—		7		1		8		.0
Total	$	—	$	—	$	344	$	13	$	357	.6

(1)Represents loans with more than one type of payment modification during the period.

(2)During both the three and six months ended June 30, 2023, the carrying value of consumer mortgage loans with a payment modification included $8 million of loans that were recorded at the lower of amortized cost or fair value of the collateral less cost to sell.

At June 30, 2023, additional commitments to lend to commercial borrowers who were provided with a loan payment modification during the six months ended June 30, 2023 totaled $40 million.

The following table summarizes the financial effect of loan payment modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023 by type of modification:

	Weighted-Average Interest Rate Reduction		Principal Forgiven (in millions)		Weighted-Average Term Extension / Payment Deferral (in years)
Three Months Ended June 30, 2023
Commercial loans:
Real estate, including construction	—	%	$	—	0.4
Business and corporate banking	—		—		1.8
Global banking	—		—		1.5
Consumer loans:
Residential mortgages	1.7		—		2.1
Six Months Ended June 30, 2023
Commercial loans:
Real estate, including construction	—	%	$	—	0.4
Business and corporate banking	—		2		2.1
Global banking	—		—		1.5
Consumer loans:
Residential mortgages	2.2		—		2.2

The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the methodology used to estimate lifetime ECL, which considers historical loss information including losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a material change to the allowance for credit losses is generally not recorded upon modification. In instances when a loan is modified in the form of principal forgiveness, the amount of principal forgiven is deemed uncollectible and that portion of the loan balance is charged off with a corresponding reduction to the allowance for credit losses.

We closely monitor the performance of modified loans to understand the effectiveness of our loss mitigation efforts. Upon determination that a modified loan or a portion of a modified loan has subsequently been deemed uncollectible, the loan or a portion of the loan is charged off in accordance with our accounting policies with a corresponding reduction to the allowance for credit losses.

During the three and six months ended June 30, 2023, there were no loans to borrowers experiencing financial difficulty with a payment modification during the previous six months which subsequently became 90 days or greater contractually delinquent.

The following table presents the past due status of loans to borrowers experiencing financial difficulty with a payment modification during the previous six months at June 30, 2023:

	Past Due
	30 - 89 Days		90+ Days		Current(1)		Total
	(in millions)
At June 30, 2023
Commercial loans:
Real estate, including construction	$	—	$	64	$	171	$	235
Business and corporate banking	—		—		109		109
Global banking	—		—		5		5
Total commercial	—		64		285		349
Consumer loans:
Residential mortgages	—		—		8		8
Total consumer	—		—		8		8
Total loans	$	—	$	64	$	293	$	357

(1)Loans less than 30 days past due are presented as current.

TDR Loans prior to 2023 Prior to January 1, 2023, TDR Loans represented loans for which the original contractual terms were modified to provide for terms that were less than what we would have been willing to accept for new loans with comparable risk because of deterioration in the borrower's financial condition. For the comparative periods prior to the adoption of the new accounting guidance, we have retained the following disclosures as previously reported.

Once a consumer loan was classified as a TDR Loan, it continued to be reported as such until it was paid off or charged-off. For commercial loans, if subsequent performance was in accordance with the new terms and the loan was upgraded, the loan may have no longer been reported as a TDR Loan at the earliest one year after the restructuring. During the three and six months ended June 30, 2022, there were no commercial loans that met these criteria and were removed from TDR Loan classification.

The following table summarizes our TDR Loans at December 31, 2022:

	December 31, 2022
	(in millions)
Commercial loans:
Business and corporate banking	$	382
Global banking	6
Total commercial(1)	388
Consumer loans:
Residential mortgages(2)	136
Home equity mortgages(2)	12
Credit cards	2
Total consumer	150
Total TDR Loans(3)	$	538

(1)Additional commitments to lend to commercial borrowers whose loans have been modified in TDR Loans totaled $38 million at December 31, 2022.

(2)At December 31, 2022, the carrying value of consumer mortgage TDR Loans included $99 million of loans that were recorded at the lower of amortized cost or fair value of the collateral less cost to sell.

(3)At December 31, 2022, the carrying value of TDR Loans included $122 million of loans which were classified as nonaccrual.

The following table presents information about loans which were modified during the three and six months ended June 30, 2022 and as a result of this action became classified as TDR Loans:

	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(in millions)
Commercial loans:
Business and corporate banking	$	99	$	101
Total commercial	99		101
Consumer loans:
Residential mortgages	5		12
Home equity mortgages	2		2
Credit cards	1		3
Total consumer	8		17
Total	$	107	$	118

The weighted-average contractual rate reduction for consumer loans which became classified as TDR Loans during the three and six months ended June 30, 2022 was 0.14 percent and 0.24 percent, respectively. The weighted-average contractual rate reduction for commercial loans was not significant in either the number of loans or rate.

During the three and six months ended June 30, 2022, there were no consumer or commercial TDR Loans which were classified as TDR Loans during the previous 12 months which subsequently became 60 days or greater contractually delinquent or 90 days or greater contractually delinquent, respectively.

Commercial Loan Credit Quality Indicators and Gross Charge-offs by Year of Origination

The following credit quality indicators are utilized to monitor our commercial loan portfolio:

Criticized loans  Criticized loan classifications presented in the table below are determined by the assignment of various criticized facility risk ratings based on the risk rating standards of our regulator. The following facility risk ratings are deemed to be criticized:

Special Mention - generally includes loans that are protected by collateral and/or the credit worthiness of the customer, but are potentially weak based upon economic or market circumstances which, if not checked or corrected, could weaken our credit position at some future date.

Substandard - includes loans that are inadequately protected by the underlying collateral and/or general credit worthiness of the customer. These loans present a distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful - includes loans that have all the weaknesses exhibited by substandard loans, with the added characteristic that the weaknesses make collection or liquidation in full of the recorded loan highly improbable. However, although the possibility of loss is extremely high, certain factors exist which may strengthen the credit at some future date, and therefore the decision to charge-off the loan is deferred. Loans graded as doubtful are required to be placed in nonaccrual status.

The following table summarizes our criticized commercial loans, including a disaggregation of the loans by year of origination as of June 30, 2023 and December 31, 2022:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Jun. 30, 2023
	(in millions)
Real estate, including construction:
Special mention	$	—	$	96	$	—	$	69	$	263	$	65	$	54	$	3	$	550
Substandard	—		—		—		1		57		1,071		18		—		1,147
Doubtful	—		—		—		—		—		64		—		—		64
Total real estate, including construction	—		96		—		70		320		1,200		72		3		1,761
Business and corporate banking:
Special mention	—		20		—		10		—		191		353		—		574
Substandard	—		13		—		27		—		145		655		1		841
Doubtful	—		—		72		9		—		8		43		—		132
Total business and corporate banking	—		33		72		46		—		344		1,051		1		1,547
Global banking:
Special mention	2		—		—		—		—		—		23		—		25
Substandard	—		218		—		—		15		99		47		—		379
Doubtful	—		—		—		—		—		29		12		—		41
Total global banking	2		218		—		—		15		128		82		—		445
Other commercial:
Substandard	—		—		—		—		—		3		—		—		3
Doubtful	—		—		—		—		—		13		12		—		25
Total other commercial	—		—		—		—		—		16		12		—		28
Total commercial:
Special mention	2		116		—		79		263		256		430		3		1,149
Substandard	—		231		—		28		72		1,318		720		1		2,370
Doubtful	—		—		72		9		—		114		67		—		262
Total commercial	$	2	$	347	$	72	$	116	$	335	$	1,688	$	1,217	$	4	$	3,781

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Dec. 31, 2022
	(in millions)
Real estate, including construction:
Special mention	$	204	$	—	$	22	$	212	$	27	$	19	$	63	$	3	$	550
Substandard	1		—		48		64		677		891		19		—		1,700
Total real estate, including construction	205		—		70		276		704		910		82		3		2,250
Business and corporate banking:
Special mention	1		—		16		1		34		116		182		—		350
Substandard	3		43		26		1		10		138		548		1		770
Doubtful	—		—		9		—		15		—		24		4		52
Total business and corporate banking	4		43		51		2		59		254		754		5		1,172
Global banking:
Special mention	—		—		—		—		—		8		182		—		190
Substandard	232		—		—		16		—		2		186		—		436
Doubtful	—		—		—		—		—		—		15		—		15
Total global banking	232		—		—		16		—		10		383		—		641
Other commercial:
Substandard	—		—		—		—		—		—		7		—		7
Doubtful	31		—		—		—		—		—		7		—		38
Total other commercial	31		—		—		—		—		—		14		—		45
Total commercial:
Special mention	205		—		38		213		61		143		427		3		1,090
Substandard	236		43		74		81		687		1,031		760		1		2,913
Doubtful	31		—		9		—		15		—		46		4		105
Total commercial	$	472	$	43	$	121	$	294	$	763	$	1,174	$	1,233	$	8	$	4,108

Nonperforming  The following table summarizes the nonperforming status of our commercial loan portfolio, including a disaggregation of the loans by year of origination as of June 30, 2023 and December 31, 2022:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Jun. 30, 2023
	(in millions)
Real estate, including construction:
Performing loans	$	56	$	1,262	$	960	$	388	$	1,483	$	2,885	$	41	$	3	$	7,078
Nonaccrual loans	—		—		—		—		41		66		—		—		107
Total real estate, including construction	56		1,262		960		388		1,524		2,951		41		3		7,185
Business and corporate banking:
Performing loans	490		1,089		816		319		647		4,762		7,626		274		16,023
Nonaccrual loans	—		14		21		9		—		22		79		—		145
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		1		—		1
Total business and corporate banking	490		1,103		837		328		647		4,784		7,706		274		16,169
Global banking:
Performing loans	448		1,512		610		162		199		4,067		3,074		—		10,072
Nonaccrual loans	—		—		—		—		10		38		7		—		55
Total global banking	448		1,512		610		162		209		4,105		3,081		—		10,127
Other commercial:
Performing loans	16		288		290		701		420		909		3,705		—		6,329
Nonaccrual loans	—		—		—		—		—		1		—		—		1
Total other commercial	16		288		290		701		420		910		3,705		—		6,330
Total commercial:
Performing loans	1,010		4,151		2,676		1,570		2,749		12,623		14,446		277		39,502
Nonaccrual loans	—		14		21		9		51		127		86		—		308
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		1		—		1
Total commercial	$	1,010	$	4,165	$	2,697	$	1,579	$	2,800	$	12,750	$	14,533	$	277	$	39,811

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Dec. 31, 2022
	(in millions)
Real estate, including construction:
Performing loans	$	1,315	$	854	$	520	$	1,671	$	1,803	$	1,710	$	42	$	3	$	7,918
Nonaccrual loans	—		—		—		43		—		2		—		—		45
Total real estate, including construction	1,315		854		520		1,714		1,803		1,712		42		3		7,963
Business and corporate banking:
Performing loans	1,107		828		443		815		292		4,995		7,275		203		15,958
Nonaccrual loans	9		—		32		—		16		24		31		4		116
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		1		—		1
Total business and corporate banking	1,116		828		475		815		308		5,019		7,307		207		16,075
Global banking:
Performing loans	2,026		449		212		177		114		4,122		3,424		—		10,524
Nonaccrual loans	8		—		—		—		—		30		16		—		54
Total global banking	2,034		449		212		177		114		4,152		3,440		—		10,578
Other commercial:
Performing loans	283		354		607		403		86		1,114		4,354		—		7,201
Total other commercial	283		354		607		403		86		1,114		4,354		—		7,201
Total commercial:
Performing loans	4,731		2,485		1,782		3,066		2,295		11,941		15,095		206		41,601
Nonaccrual loans	17		—		32		43		16		56		47		4		215
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		1		—		1
Total commercial	$	4,748	$	2,485	$	1,814	$	3,109	$	2,311	$	11,997	$	15,143	$	210	$	41,817

Credit risk profile  Commercial loans are assigned a credit rating based on the estimated probability of default. Investment grade includes loans with credit ratings of at least BBB- or above or the equivalent based on our internal credit rating system. The following table summarizes the credit risk profile of our commercial loan portfolio, including a disaggregation of the loans by year of origination as of June 30, 2023 and December 31, 2022:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Jun. 30, 2023
	(in millions)
Real estate, including construction:
Investment grade	$	—	$	20	$	25	$	188	$	115	$	994	$	—	$	—	$	1,342
Non-investment grade	56		1,242		935		200		1,409		1,957		41		3		5,843
Total real estate, including construction	56		1,262		960		388		1,524		2,951		41		3		7,185
Business and corporate banking:
Investment grade	374		325		495		61		362		2,556		3,647		34		7,854
Non-investment grade	116		778		342		267		285		2,228		4,059		240		8,315
Total business and corporate banking	490		1,103		837		328		647		4,784		7,706		274		16,169
Global banking:
Investment grade	297		1,376		481		157		184		3,129		2,652		—		8,276
Non-investment grade	151		136		129		5		25		976		429		—		1,851
Total global banking	448		1,512		610		162		209		4,105		3,081		—		10,127
Other commercial:
Investment grade	16		230		70		539		311		743		3,623		—		5,532
Non-investment grade	—		58		220		162		109		167		82		—		798
Total other commercial	16		288		290		701		420		910		3,705		—		6,330
Total commercial:
Investment grade	687		1,951		1,071		945		972		7,422		9,922		34		23,004
Non-investment grade	323		2,214		1,626		634		1,828		5,328		4,611		243		16,807
Total commercial	$	1,010	$	4,165	$	2,697	$	1,579	$	2,800	$	12,750	$	14,533	$	277	$	39,811

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total at Dec. 31, 2022
	(in millions)
Real estate, including construction:
Investment grade	$	80	$	45	$	305	$	178	$	783	$	278	$	—	$	—	$	1,669
Non-investment grade	1,235		809		215		1,536		1,020		1,434		42		3		6,294
Total real estate, including construction	1,315		854		520		1,714		1,803		1,712		42		3		7,963
Business and corporate banking:
Investment grade	491		484		122		444		71		2,758		3,657		21		8,048
Non-investment grade	625		344		353		371		237		2,261		3,650		186		8,027
Total business and corporate banking	1,116		828		475		815		308		5,019		7,307		207		16,075
Global banking:
Investment grade	1,814		449		212		146		84		2,911		3,006		—		8,622
Non-investment grade	220		—		—		31		30		1,241		434		—		1,956
Total global banking	2,034		449		212		177		114		4,152		3,440		—		10,578
Other commercial:
Investment grade	267		77		518		81		74		935		4,110		—		6,062
Non-investment grade	16		277		89		322		12		179		244		—		1,139
Total other commercial	283		354		607		403		86		1,114		4,354		—		7,201
Total commercial:
Investment grade	2,652		1,055		1,157		849		1,012		6,882		10,773		21		24,401
Non-investment grade	2,096		1,430		657		2,260		1,299		5,115		4,370		189		17,416
Total commercial	$	4,748	$	2,485	$	1,814	$	3,109	$	2,311	$	11,997	$	15,143	$	210	$	41,817

Gross Charge-offs  The following table summarizes gross charge-off dollars in our commercial loan portfolio, disaggregated by year of origination, during the six months ended June 30, 2023:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(in millions)
Business and corporate banking	$	—	$	—	$	—	$	—	$	—	$	3	$	3	$	—	$	6
Total commercial	$	—	$	—	$	—	$	—	$	—	$	3	$	3	$	—	$	6

Consumer Loan Credit Quality Indicators and Gross Charge-offs by Year of Origination

The following credit quality indicators are utilized to monitor our consumer loan portfolio:

Delinquency  The following table summarizes dollars of two-months-and-over contractual delinquency for our consumer loan portfolio, including a disaggregation of the loans by year of origination as of June 30, 2023 and December 31, 2022:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total at Jun. 30, 2023
	(in millions)
Residential mortgages(1)(2)	$	—	$	7	$	3	$	10	$	2	$	100	$	—	$	122
Home equity mortgages(1)(2)	—		—		—		—		—		3		—		3
Credit cards	—		—		—		—		—		—		4		4
Other consumer	—		—		—		—		—		2		—		2
Total consumer	$	—	$	7	$	3	$	10	$	2	$	105	$	4	$	131

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total at Dec. 31, 2022
	(in millions)
Residential mortgages(1)(2)	$	6	$	4	$	8	$	16	$	10	$	97	$	—	$	141
Home equity mortgages(1)(2)	—		—		—		—		—		3		—		3
Credit cards	—		—		—		—		—		—		3		3
Other consumer	—		—		—		—		—		2		1		3
Total consumer	$	6	$	4	$	8	$	16	$	10	$	102	$	4	$	150

(1)At June 30, 2023 and December 31, 2022, consumer mortgage loan delinquency includes $57 million and $60 million, respectively, of loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.

(2)At June 30, 2023 and December 31, 2022, consumer mortgage loans include $24 million and $21 million, respectively, of loans that were in the process of foreclosure.

Nonperforming  The following table summarizes the nonperforming status of our consumer loan portfolio, including a disaggregation of the loans by year of origination as of June 30, 2023 and December 31, 2022:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total at Jun. 30, 2023
	(in millions)
Residential mortgages:
Performing loans	$	1,183	$	2,800	$	4,186	$	2,853	$	1,266	$	4,960	$	—	$	17,248
Nonaccrual loans	—		14		7		17		17		149		—		204
Total residential mortgages	1,183		2,814		4,193		2,870		1,283		5,109		—		17,452
Home equity mortgages:
Performing loans	29		66		11		24		28		195		—		353
Nonaccrual loans	—		5		—		—		—		6		—		11
Total home equity mortgages	29		71		11		24		28		201		—		364
Credit cards:
Performing loans	—		—		—		—		—		—		194		194
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		3		3
Total credit cards	—		—		—		—		—		—		197		197
Other consumer:
Performing loans	—		13		8		8		4		79		9		121
Total other consumer	—		13		8		8		4		79		9		121
Total consumer:
Performing loans	1,212		2,879		4,205		2,885		1,298		5,234		203		17,916
Nonaccrual loans	—		19		7		17		17		155		—		215
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		3		3
Total consumer	$	1,212	$	2,898	$	4,212	$	2,902	$	1,315	$	5,389	$	206	$	18,134

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total at Dec. 31, 2022
	(in millions)
Residential mortgages:
Performing loans	$	2,885	$	4,272	$	2,936	$	1,300	$	729	$	4,503	$	—	$	16,625
Nonaccrual loans	2		8		13		23		22		145		—		213
Total residential mortgages	2,887		4,280		2,949		1,323		751		4,648		—		16,838
Home equity mortgages:
Performing loans	74		12		24		32		13		208		—		363
Nonaccrual loans	—		—		—		—		—		7		—		7
Total home equity mortgages	74		12		24		32		13		215		—		370
Credit cards:
Performing loans	—		—		—		—		—		—		211		211
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		2		2
Total credit cards	—		—		—		—		—		—		213		213
Other consumer:
Performing loans	14		10		9		6		—		91		11		141
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		1		1
Total other consumer	14		10		9		6		—		91		12		142
Total consumer:
Performing loans	2,973		4,294		2,969		1,338		742		4,802		222		17,340
Nonaccrual loans	2		8		13		23		22		152		—		220
Accruing loans contractually past due 90 days or more	—		—		—		—		—		—		3		3
Total consumer	$	2,975	$	4,302	$	2,982	$	1,361	$	764	$	4,954	$	225	$	17,563

Gross Charge-offs  The following table summarizes gross charge-off dollars in our consumer loan portfolio, disaggregated by year of origination, during the six months ended June 30, 2023:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
	(in millions)
Residential mortgages	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Home equity mortgages	—		—		—		—		—		1		—		1
Credit cards	—		—		—		—		—		—		4		4
Other consumer	—		—		—		—		—		1		—		1
Total consumer	$	—	$	—	$	—	$	—	$	—	$	6	$	4	$	10

Concentration of Credit Risk  At June 30, 2023 and December 31, 2022, our loan portfolios included interest-only residential mortgage and home equity mortgage loans totaling $4,215 million and $4,063 million, respectively. An interest-only residential mortgage loan allows a customer to pay the interest-only portion of the monthly payment for a period of time which results in lower payments during the initial loan period. However, subsequent events affecting a customer's financial position could affect the ability of customers to repay the loan in the future when the principal payments are required which increases the credit risk of this loan type.