Leading franchise in U.K. retail banking, and strong positions in U.K. corporate banking and insurance. Cost-efficient operating model that supports business stability, competitiveness, and good relative profitability. Supportive capitalization, funding, and liquidity profiles. Geographically concentrated in the U.K. Residual downside risks of weaker economic conditions as the U.K. moves to exit the EU (Brexit). The stable outlook on our ratings on Lloyds reflects our view that it should be relatively resilient to the uncertainties and potential turbulence arising from the Brexit negotiations in the period to March 2019. We expect that Lloyds' statutory profitability will improve further over our two-year outlook horizon; that our risk-adjusted capital (RAC) ratio will be about 7.8%-8.3% through that period (it was 8.0% at end-2017);
