Leading position in U.K. retail banking and strong positions in U.K. commercial and corporate banking, and insurance. Solid capitalization. Sustained improvement in funding and liquidity profiles. Yet to demonstrate a return to meaningful and recurring annual statutory profit. Relatively poor asset quality track record, albeit substantially improved after substantial derisking. Reducing but continued earnings drag from conduct charges and restructuring. The positive outlook on nonoperating holding company (NOHC) Lloyds Banking Group (LBG) reflects our expectation that we continue to see an at-least one-in-three chance that we will revise upward the unsupported group credit profile (GCP) by one notch inside the next 12 months. We expect further improvement in Lloyds' earnings and capitalization, and consider that its exposure to unexpected losses
