...Leading Dom estic Retail Franchise: Lloyds Banking Group plc's (LBG) Viability Rating (VR) primarily reflects the group's strong UK franchise, solid capitalisation and funding, and low risk appetite. Activities are geographically concentrated in the UK but the group's business model is w ell-diversified by product and by sector. Fitch Ratings' view of LBG's franchise is underpinned by the group's strong market position across several businesses, w hich provides the group w ith considerable deposit and loan pricing-pow er. Strengthened Profitability: The group's underlying profitability has improved thanks to low loan impairment charges, decreasing funding costs and strong grow th in higher -yielding assets. Legacy costs have declined but continue to w eigh on net income, particularly in relation to conduct. Fitch believes that charges related to conduct costs should become less material, although they are inherently difficult to predict. This should enable net income to continue to move...
