DBRS changes Lloyds trend to stable

DBRS said it confirmed the ratings of Lloyds Banking Group plc, including the A (high) issuer and long-term debt ratings. The ratings of Lloyds Bank plc were also confirmed at AA (low) for the senior debt and deposit rating and R-1 (middle) for the short-term rating.

The trend on all long-term ratings was revised to stable from negative while the trend on the short-term rating remains stable.

In revising the trend to stable, the agency said it recognizes the significant progress that Lloyds has continued to make over the past 18 months in the restructuring of the group, and notes that this is now in its final stages. Over this period, Lloyds has also demonstrated further improvements in asset quality, costs, funding and capital.

In addition, the UK Government has been able to reduce its shareholding to 24.9% and the group has now sold a 38.5% stake in TSB, the first step in the EU mandated sale of this business. The agency noted that the group’s net profitability continues to be affected by legacy and one-off items, but expects the impact of these to decline considerably in coming periods.

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