Lloyds Bank PLC

The stable outlook mirrors that on ultimate parent LBG. The stable outlook on LBG reflects our view that its strong capitalization and competitive position provide a cushion for the rating amid rising inflation and slowing economic growth. Our ratings on LB will move in tandem with those on LBG as long as we continue to view LB as a core subsidiary of the group. An upgrade is a remote prospect. In the event we raised the ratings on LBG by improving the group stand-alone credit profile to 'a' from 'a-', it is unlikely that we would raise ratings on LB. This is because, at this elevated ratings level, we would apply a maximum one-notch uplift for ALAC compared with two

...S&P Global Ratings views Lloyds Bank PLC (LB) as a core subsidiary of Lloyds Banking Group PLC (LBG). LB has an integral role in its parent's strategy, and a dominant share of the group's consolidated earnings and capital. Its brand and reputation are intertwined with the group's. We align our long-term issuer credit rating on LB with the 'a+' group credit profile on LBG, which includes a two-notch uplift for additional loss-absorbing capacity (ALAC). We do not assess LB's stand-alone credit profile. LB is LBG's largest subsidiary. It is the main entity in the ring-fenced bank subgroup, and its consolidated regulatory risk-weighted assets (RWAs) represented 82% of LBG's RWAs at Sept. 30, 2022. It is the market leader in U.K. retail banking and one of the main competitors in U.K. commercial banking alongside ring-fenced bank peers Barclays Bank UK PLC, HSBC UK Bank PLC, and National Westminster Bank PLC. LB's main subsidiary is Bank of Scotland PLC (A+/Stable/A-1), which operates primarily...

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