Leading business position in the U.K. banking, insurance, and investment markets; Strong returns from banking and general insurance businesses; Reduced risk profile and earnings volatility following disposal of several overseas businesses and improved capital discipline in the life assurance business; and Robust asset quality. Core capitalization is weak when adjusted for capital held in the life business; A high dividend payout constrains financial flexibility; and The acquisition of life subsidiary Scottish Widows PLC at the peak of the equity market has diluted group earnings. The ratings on Lloyds TSB Bank PLC (LTSB) reflect its excellent business position, strong banking returns diluted by lower-than-expected life assurance earnings, and stable asset quality. Notwithstanding LTSB's good regulatory ratios, core capitalization is weak by
