S&P affirms Lloyds

Standard & Poor's said that it affirmed the A/A-1 counterparty credit ratings on Lloyds Banking Group plc and the A+/A-1 counterparty credit ratings on its core U.K. bank subsidiaries Lloyds TSB Bank plc and Bank of Scotland plc.

The outlook remains stable.

S&P revised the stand-alone credit profile of Lloyds' core bank subsidiaries to A- from BBB+ and raised the nondeferrable subordinated debt ratings to BBB+ from BBB. The C ratings of the "may pay" perpetual subordinated capital instruments are unaffected.

The affirmation and the revisions reflect the view that Lloyds has made steady progress over the past year to improve several areas of its financial profile, S&P said.

The affirmation also reflects the belief that Lloyds' financial profile will improve sufficiently by end-2012 to eliminate the current two-notch gap between the counterparty credit rating and the stand-alone credit profile, the agency added.

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