The senior unsecured debt and deposit ratings of Lloyds TSB Bank and Bank of Scotland was kept at Aa3 with a stable outlook.
But the bank financial strength rating for Bank of Scotland was downgraded to D+ from C- with the outlook on all BFSRs remaining negative.
Senior credit officer and lead analyst for Lloyds Elisabeth Rudman said: “Following Lloyds’ decision to opt out of the Government’s Asset Protection Scheme, the capital being raised should provide the group with a sufficient buffer against the remaining expected losses.
“Nevertheless, Lloyds is now more exposed towards the tail-risk of a potentially worse-than expected asset quality deterioration, which is reflected in the downgrade of the BFSR to C-. The Aa3 debt ratings of Lloyds TSB remain unaffected as we assume an unchanged likelihood of support.”