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Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Schedule of Derivative Instruments in Statement of Financial Position | The following table summarizes the amounts of derivative instruments reported on our Condensed Consolidated Balance Sheet. The amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories. Derivative contracts in a receivable and payable position exclude open trade equity on derivatives cleared through central clearing counterparties. Any associated margin exchanged with our central clearing counterparties are treated as settlements of the derivative exposure, rather than collateral. Such payments are recognized as settlements of the derivatives contracts in a receivable and payable position on our Condensed Consolidated Balance Sheet. Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.
|  | March 31, 2024 |  | December 31, 2023
|  | Derivative contracts in a |  | Notional amount |  | Derivative contracts in a |  | Notional amount
($ in millions) |  | receivable position |  | payable position |  | receivable position |  | payable position |
Derivatives designated as accounting hedges |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |
Swaps |  | $ | — |  |  | $ | — |  |  | $ | 32,390 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,835 |
Purchased options |  | 9 |  |  | — |  |  | 6,250 |  |  | 31 |  |  | — |  |  | 6,250 |
Foreign exchange contracts |  |  |  |  |  |  |  |  |  |  |  |
Forwards |  | — |  |  | — |  |  | 160 |  |  | — |  |  | 6 |  |  | 166 |
Total derivatives designated as accounting hedges |  | 9 |  |  | — |  |  | 38,800 |  |  | 31 |  |  | 6 |  |  | 42,251 |
Derivatives not designated as accounting hedges |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |
Swaps |  | — |  |  | — |  |  | 1,000 |  |  | — |  |  | — |  |  | 2,000 |
Forwards |  | — |  |  | — |  |  | 92 |  |  | — |  |  | — |  |  | 70 |
Written options |  | 2 |  |  | — |  |  | 115 |  |  | 2 |  |  | — |  |  | 88 |
Total interest rate risk |  | 2 |  |  | — |  |  | 1,207 |  |  | 2 |  |  | — |  |  | 2,158 |
Foreign exchange contracts |  |  |  |  |  |  |  |  |  |  |  |
Forwards |  | — |  |  | — |  |  | 57 |  |  | — |  |  | 1 |  |  | 59 |
Total foreign exchange risk |  | — |  |  | — |  |  | 57 |  |  | — |  |  | 1 |  |  | 59 |
Credit contracts (a) |  |  |  |  |  |  |  |  |  |  |  |
Other credit derivatives |  | — |  |  | 10 |  |  | n/a |  | — |  |  | 10 |  |  | n/a
Total credit risk |  | — |  |  | 10 |  |  | n/a |  | — |  |  | 10 |  |  | n/a
Equity contracts |  |  |  |  |  |  |  |  |  |  |  |
Written options |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |
Purchased options |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total equity risk |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |
Total derivatives not designated as accounting hedges |  | 3 |  |  | 11 |  |  | 1,264 |  |  | 2 |  |  | 11 |  |  | 2,217 |
Total derivatives |  | $ | 12 |  |  | $ | 11 |  |  | $ | 40,064 |  |  | $ | 33 |  |  | $ | 17 |  |  | $ | 44,468 |
n/a = not applicable (a)The maximum potential amount of undiscounted future payments that could be required under these credit derivatives was $24 million and $29 million as of March 31, 2024, and December 31, 2023, respectively.
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table presents amounts recorded on our Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.
|  | Carrying amount of the hedged items |  | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
|  | Total |  | Discontinued (a)
($ in millions) |  | March 31, 2024 |  | December 31, 2023 |  | March 31, 2024 |  | December 31, 2023 |  | March 31, 2024 |  | December 31, 2023
Assets |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities (b) |  | $ | 15,937 |  |  | $ | 16,302 |  |  | $ | (278) |  |  | $ | (79) |  |  | $ | (151) |  |  | $ | (156) |
Finance receivables and loans, net (c) |  | 47,482 |  |  | 54,189 |  |  | (181) |  |  | (93) |  |  | (21) |  |  | (27) |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Long-term debt |  | $ | 7,765 |  |  | $ | 7,750 |  |  | $ | 97 |  |  | $ | 100 |  |  | $ | 97 |  |  | $ | 100 |
(a)Represents the fair value hedging adjustment on qualifying hedges for which the hedging relationship was discontinued. This represents a subset of the amounts reported in the total hedging adjustment. (b)These amounts include the amortized cost basis and unallocated basis adjustments of closed portfolios of available-for-sale securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2024, and December 31, 2023, the amortized cost basis and unallocated basis adjustments of the closed portfolios used in these hedging relationships was $14.5 billion and $14.8 billion, respectively, of which $14.2 billion and $14.6 billion, respectively, represents the amortized cost basis and unallocated basis adjustments of closed portfolios designated in an active hedge relationship. At March 31, 2024, and December 31, 2023, the total cumulative basis adjustments associated with these hedging relationships was a $225 million liability and a $45 million liability, respectively, of which the portion related to discontinued hedging relationships was a $116 million liability and a $120 million liability, respectively. At both March 31, 2024, and December 31, 2023, the notional amounts of the designated hedged items were $11.3 billion, with cumulative basis adjustments of a $109 million liability and a $75 million asset, respectively, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship. Refer to Note 7 for a reconciliation of the amortized cost and fair value of available-for-sale securities. (c)These amounts include the carrying value of closed portfolios of loan receivables used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2024, and December 31, 2023, the carrying value of the closed portfolios used in these hedging relationships was $47.5 billion and $54.2 billion, respectively, of which $41.0 billion and $50.0 billion, respectively, represents the carrying value of closed portfolios designated in an active hedge relationship. At March 31, 2024, and December 31, 2023, the total cumulative basis adjustments associated with these hedging relationships was a $181 million liability and a $93 million liability, respectively, of which the portion related to discontinued hedging relationships was a $21 million liability and a $27 million liability, respectively. At March 31, 2024, and December 31, 2023, the notional amounts of the designated hedged items were $19.7 billion and $23.2 billion, respectively, with cumulative basis adjustments of a $160 million liability and a $66 million liability, respectively, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship.
Schedule of Derivative Instruments Not Designated as Accounting Hedge | The following table summarizes the location and amounts of gains and losses on derivative instruments not designated as accounting hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.
|  |  |  | Three months ended March 31, |  |
($ in millions) |  |  |  |  |  | 2024 |  | 2023 |  |
Gain (loss) recognized in earnings |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |
Gain on mortgage and automotive loans, net |  |  |  |  |  | $ | 5 |  |  | $ | 5 |  |  |
Total interest rate contracts |  |  |  |  |  | 5 |  |  | 5 |  |  |
Foreign exchange contracts |  |  |  |  |  |  |  |  |  |
Other operating expenses |  |  |  |  |  | 1 |  |  | 1 |  |  |
Total foreign exchange contracts |  |  |  |  |  | 1 |  |  | 1 |  |  |
Credit contracts |  |  |  |  |  |  |  |  |  |
Other income, net of losses |  |  |  |  |  | — |  |  | (5) |  |  |
Total credit contracts |  |  |  |  |  | — |  |  | (5) |  |  |
Equity contracts |  |  |  |  |  |  |  |  |  |
Other income, net of losses |  |  |  |  |  | — |  |  | (4) |  |  |
Total equity contracts |  |  |  |  |  | — |  |  | (4) |  |  |
Total gain (loss) recognized in earnings |  |  |  |  |  | $ | 6 |  |  | $ | (3) |  |  |
Schedule of Location and Amounts of Gains and Losses on Derivative Instruments | The following table summarizes the location and amounts of gains and losses on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.
| Interest and fees on finance receivables and loans |  | Interest and dividends on investment securities and other earning assets |  |  |  | Interest on long-term debt
Three months ended March 31, ($ in millions) | 2024 | 2023 |  |  | 2024 | 2023 |  |  |  |  |  |  | 2024 | 2023 |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedged fixed-rate unsecured debt | $ | — |  | $ | — |  |  |  | $ | — |  | $ | — |  |  |  |  |  |  |  | $ | — |  | $ | 1 |  |
Derivatives designated as hedging instruments on fixed-rate unsecured debt | — |  | — |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | (1) |  |
Hedged available-for-sale securities | — |  | — |  |  |  | (205) |  | 130 |  |  |  |  |  |  |  | — |  | — |  |
Derivatives designated as hedging instruments on available-for-sale securities | — |  | — |  |  |  | 205 |  | (130) |  |  |  |  |  |  |  | — |  | — |  |
Hedged fixed-rate consumer automotive loans | (94) |  | 205 |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
Derivatives designated as hedging instruments on fixed-rate consumer automotive loans | 94 |  | (205) |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
Total gain on fair value hedging relationships | — |  | — |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
(Loss) gain on cash flow hedging relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedged variable-rate commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reclassified from accumulated other comprehensive loss into income | (1) |  | 5 |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
Total (loss) gain on cash flow hedging relationships | $ | (1) |  | $ | 5 |  |  |  | $ | — |  | $ | — |  |  |  |  |  |  |  | $ | — |  | $ | — |  |
Total amounts presented in the Condensed Consolidated Statement of Comprehensive (Loss) Income | $ | 2,827 |  | $ | 2,575 |  |  |  | $ | 266 |  | $ | 238 |  |  |  |  |  |  |  | $ | 248 |  | $ | 227 |  |
Schedule of Derivative Instruments | The following table summarizes the location and amounts of gains and losses related to interest and amortization on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.
| Interest and fees on finance receivables and loans |  | Interest and dividends on investment securities and other earning assets |  |  |  | Interest on long-term debt
Three months ended March 31, ($ in millions) | 2024 | 2023 |  |  | 2024 | 2023 |  |  |  |  |  |  | 2024 | 2023 |
Gain on fair value hedging relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of deferred unsecured debt basis adjustments | $ | — |  | $ | — |  |  |  | $ | — |  | $ | — |  |  |  |  |  |  |  | $ | 2 |  | $ | 2 |  |
Amortization of deferred secured debt basis adjustments (FHLB advances) | — |  | — |  |  |  | — |  | — |  |  |  |  |  |  |  | 1 |  | 1 |  |
Amortization of deferred basis adjustments of available-for-sale securities | — |  | — |  |  |  | 6 |  | 5 |  |  |  |  |  |  |  | — |  | — |  |
Interest for qualifying accounting hedges of available-for-sale securities | — |  | — |  |  |  | 48 |  | 13 |  |  |  |  |  |  |  | — |  | — |  |
Amortization of deferred loan basis adjustments | 5 |  | 10 |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
Interest for qualifying accounting hedges of consumer automotive loans held for investment | 82 |  | 162 |  |  |  | — |  | — |  |  |  |  |  |  |  | — |  | — |  |
Total gain on fair value hedging relationships | $ | 87 |  | $ | 172 |  |  |  | $ | 54 |  | $ | 18 |  |  |  |  |  |  |  | $ | 3 |  | $ | 3 |  |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the effect of cash flow hedges on accumulated other comprehensive loss.
|  |  | Three months ended March 31, |  |
($ in millions) |  |  |  |  | 2024 |  | 2023 |  |
Interest rate contracts |  |  |  |  |  |  |  |  |
Loss recognized in other comprehensive (loss) income |  |  |  |  | $ | (21) |  |  | $ | (1) |  |  |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the effect of net investment hedges on accumulated other comprehensive loss.
|  |  | Three months ended March 31, |  |
($ in millions) |  |  |  |  | 2024 |  | 2023 |  |
Foreign exchange contracts (a) (b) |  |  |  |  |  |  |  |  |
Gain recognized in other comprehensive (loss) income |  |  |  |  | $ | 4 |  |  | $ | — |  |  |
(a)There were no amounts excluded from effectiveness testing for the three months ended March 31, 2024, or 2023. (b)Gains and losses reclassified from accumulated other comprehensive loss are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive (Loss) Income. There were no amounts reclassified for the three months ended March 31, 2024, or 2023.

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