The ratings on Lloyds TSB Bank PLC (LTSB) reflect its excellent business position, the dilutive effect of disappointing life assurance earnings on its strong banking profitability, and its stable asset quality. Core capitalization is weak by Standard&Poor's measures, notwithstanding LTSB's relatively low risk profile and good regulatory capital ratios. LTSB has an extensive franchise in the U.K., particularly in the retail sector. The profitability of its banking and general insurance businesses compares well internationally, supported by their good cost efficiency, but organic revenue growth has been weak in the recent past. Following key management changes over the past year, the reinvigoration of LTSB's franchise has become a strategic priority, and there have been encouraging signs of progress in
