Leading franchise in U.K. banking, insurance, and investment markets; Strong risk-adjusted earnings; Improving revenue growth and tight cost control; and Credit risk profile underpinned by a large residential mortgage book. Weak core capitalization by Standard&Poor's Ratings Services measures, although capital flexibility is improving; Less international diversification than most similarly rated peers; and Increasing impairment losses on retail unsecured lending, although from a low base. The ratings on U.K.-incorporated Lloyds TSB Bank PLC recognize its excellent domestic business position, strong risk-adjusted profitability, and controlled risk profile. They also reflect Standard&Poor's Ratings Services expectation that its weak capitalization, according to our measures, will improve over the next three years. Lloyds TSB has a strong franchise in U.K. financial
