The ratings on U.K.-incorporated Lloyds TSB Bank PLC (LTSB) recognize its excellent domestic business position, strong banking earnings diluted by lower life assurance returns, and stable asset quality. The ratings are constrained by its weak core capitalization by Standard&Poor's Ratings Services' measures, which adjust for its substantial life business. LTSB's performance is driven by its extensive franchise in the U.K. retail and corporate sectors. International activities are limited following business disposals in 2003-2004. Banking and general insurance profitability is strong, but organic revenue growth has until recently been lower than its U.K. peers' domestic operations. The reinvigoration of LTSB's franchise is a strategic priority, and there have been clear signs of progress in volume growth and in cross
