The ratings on Lloyds TSB Bank PLC (Lloyds TSB) reflect its strong profitability, good asset quality, and the strength of its franchise in U.K. retail banking and other financial services. Lloyds TSB--which includes the operations of Cheltenham&Gloucester PLC (C&G; not rated), and the former Scottish Widows' Fund&Life Assurance Society (now Scottish Widows PLC; not rated)--is among the largest retail financial services group in the U.K., and a leading player in the residential mortgage and life and pensions markets. Given Lloyds TSB's business profile, capitalization is satisfactory for the rating category. Lloyds TSB's underlying profitability is strong compared with international peers. This is attributable to a highly focused strategy that has led to strong noninterest income growth
