...LBG's business focuses on the UK (AA/Negative; Macro Prudential Indicator of MPI 1 ¡low risk). The Negative Outlook on the Sovereign Rating reflects a challenging macro-environment. The Outlook also reflects possible negative implications for UK banks' domestic operations, which result from uncertainties from the UK's exit of the EU. The UK private sector is highly indebted, and its financial health has been worsening, therefore reducing its resilience to income or interest rate shocks. High household debt is a constraint in our assessment of UK banks' operating environment, and caps UK domestic banks' VRs in the `a' range. Fitch views the UK regulatory framework as strong, developed, transparent and proactive. LBG is regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority and its deposits (up to GBP85,000) are protected by the UK's deposit insurance scheme. Financial sector regulation focuses on strengthening capital and, within the retail sector, on...
