In mid-2018, Lloyds Banking Group (Lloyds) plans to complete the formal separation of its banking operations under the U.K.'s ring-fencing requirements.



  • In mid-2018, Lloyds Banking Group (Lloyds) plans to complete the formal separation of its banking operations under the U.K.'s ring-fencing requirements.
  • Subject to its successful acquisition of a U.K. banking license and U.K. court approval of the associated scheme of transfer, Lloyds Bank Corporate Markets PLC (LBCM) will receive a substantial transfer of business from Lloyds Bank and Bank of Scotland, Lloyds' principal ring-fenced subsidiaries.
  • LBCM will own Lloyds Bank International Ltd. (LBIL), Lloyds' existing Jersey-based bank.
  • In continued anticipation of the completion of this transfer, we are affirming our 'A-/A-2' preliminary ratings on LBCM and LBIL.
  • The negative outlook reflects that on Lloyds, and reflects the risks that we see to the group's creditworthiness if the operating environment becomes much tougher for U.K. banks as the U.K. exits the EU.


  • On July 17, 2017, we assigned our preliminary ratings to LBCM and LBIL based 
    on our expectation that the formal separation of Lloyds' banking operations to 
    comply with the U.K.'s ring-fencing requirements will be completed as 
    management expects in mid-2018. Lloyds continues to progress its ring-fencing plan and our views on the prospective creditworthiness of the two non-ring-fenced 
    subsidiaries have not changed. We have therefore affirmed our ratings on both 
    entities.
    
    We continue to anticipate that these entities will remain integral to Lloyds' 
    provision of comprehensive banking services to U.K.-based corporates and 
    financial institutions, inward-bound activity by overseas corporates, and 
    offshore private banking clients.