Bank of America 2015 Annual Report Download - page 87

Bank of America 2015 85
Table 52 Top 20 Non-U.S. Countries Exposure
(Dollars in millions)
Funded Loans
and Loan
Equivalents
Unfunded
Loan
Commitments
Net
Counterparty
Exposure
Securities/
Other
Investments
Country
Exposure at
December 31
2015
Hedges and
Credit Default
Protection
Net Country
Exposure at
December 31
2015
Increase
(Decrease) from
December 31
2014
United Kingdom $ 30,268 $ 15,086 $ 8,923 $ 4,194 $ 58,471 $ (5,225) $53,246 $ 7,699
Brazil 9,981 401 902 4,593 15,877 (227) 15,650 666
Canada 5,522 6,695 2,279 2,097 16,593 (1,861) 14,732 (3,808)
Japan 13,381 532 1,145 718 15,776 (1,412) 14,364 (2,370)
Germany 7,373 6,389 2,604 1,991 18,357 (4,953) 13,404 845
China 9,207 627 739 748 11,321 (847) 10,474 (1,818)
India 7,045 238 363 2,880 10,526 (172) 10,354 (232)
Australia 5,061 2,390 705 1,737 9,893 (348) 9,545 1,872
France 2,822 4,795 1,392 3,816 12,825 (4,139) 8,686 (1,752)
Netherlands 3,329 3,283 879 1,631 9,122 (1,488) 7,634 (501)
Hong Kong 5,850 273 788 701 7,612 (23) 7,589 (1,019)
South Korea 4,351 749 674 1,751 7,525 (667) 6,858 409
Switzerland 3,337 2,947 707 650 7,641 (1,378) 6,263 (268)
Belgium 648 4,749 149 185 5,731 (263) 5,468 4,260
Italy 2,933 1,062 1,544 1,563 7,102 (1,794) 5,308 (91)
Mexico 2,708 1,327 141 1,209 5,385 (331) 5,054 783
Singapore 2,297 167 481 1,843 4,788 (59) 4,729 725
Turkey 2,996 172 30 49 3,247 (107) 3,140 652
Spain 1,847 677 231 940 3,695 (632) 3,063 (553)
United Arab Emirates 2,008 56 1,027 37 3,128 (102) 3,026 619
Total top 20 non-U.S.
countries exposure $ 122,964 $ 52,615 $ 25,703 $ 33,333 $ 234,615 $ (26,028) $ 208,587 $ 6,118
Weakening of commodity prices, signs of slowing growth in
China and a recession in Brazil are driving risk aversion in emerging
markets. Net exposure to China decreased to $10.5 billion at
December 31, 2015, concentrated in large state-owned
companies, subsidiaries of multinational corporations and
commercial banks. Net exposure to Brazil was $15.7 billion,
concentrated in sovereign securities, oil and gas companies and
commercial banks.
Russian intervention in Ukraine initiated in 2014 significantly
increased regional geopolitical tensions. The Russian economy
continues to slow due to the negative impacts of weak oil prices,
ongoing economic sanctions and high interest rates resulting from
Russian central bank actions taken to counter ruble depreciation.
Net exposure to Russia was reduced to $2.2 billion at
December 31, 2015, concentrated in oil and gas companies and
commercial banks. Our exposure to Ukraine at December 31,
2015 was minimal. In response to Russian actions, U.S. and
European governments have imposed sanctions on a limited
number of Russian individuals and business entities. Geopolitical
and economic conditions remain fluid with potential for further
escalation of tensions, increased severity of sanctions against
Russian interests, sustained low oil prices and rating agency
downgrades.
Certain European countries, including Italy, Spain, Ireland and
Portugal, have experienced varying degrees of financial stress in
recent years. While market conditions have improved in Europe,
policymakers continue to address fundamental challenges of
competitiveness, growth, deflation and high unemployment. A
return of political stress or financial instability in these countries
could disrupt financial markets and have a detrimental impact on
global economic conditions and sovereign and non-sovereign debt
in these countries. Net exposure at December 31, 2015 to Italy
and Spain was $5.3 billion and $3.1 billion as presented in Table
52. Net exposure at December 31, 2015 to Ireland and Portugal
was $1.0 billion and $54 million. We expect to continue to support
client activities in the region and our exposures may vary over time
as we monitor the situation and manage our risk profile.
Table 53 presents countries where total cross-border exposure
exceeded one percent of our total assets. At December 31, 2015,
the United Kingdom and France were the only countries where total
cross-border exposure exceeded one percent of our total assets.
At December 31, 2015, Canada and Germany had total cross-
border exposure of $18.3 billion and $16.5 billion representing
0.85 percent and 0.77 percent of our total assets. No other
countries had total cross-border exposure that exceeded 0.75
percent of our total assets at December 31, 2015.
Cross-border exposures in Table 53 are calculated using Federal
Financial Institutions Examination Council (FFIEC) guidelines and
not our internal risk management view; therefore, exposures are
not comparable between Tables 52 and 53. Exposure includes
cross-border claims by our non-U.S. offices including loans,
acceptances, time deposits placed, trading account assets,
securities, derivative assets, other interest-earning investments
and other monetary assets. Amounts also include unfunded
commitments, letters of credit and financial guarantees, and the
notional amount of cash loaned under secured financing
transactions. Sector definitions are consistent with FFIEC reporting
requirements for preparing the Country Exposure Report.