Moody's on Jan. 29 assigned Lloyds Banking Group PLC a notional "a3" baseline and adjusted baseline credit assessments.
The rating agency affirmed Lloyds' A3 senior unsecured debt rating with a stable outlook.
Meanwhile, Moody's upgraded the long-term counterparty risk ratings of Lloyds Bank PLC, HBOS PLC and Bank of Scotland PLC to Aa2 from Aa3 and their long-term counterparty risk assessments to Aa2(cr) from Aa3(cr).
Moody's also affirmed several other ratings of the subsidiaries, including Lloyds Bank's Aa3/P-1 long- and short-term bank deposit ratings, HBOS' Aa3/P-1 long- and short-term issuer ratings and Bank of Scotland's Aa3 senior unsecured debt rating. The outlook on all the long-term ratings and senior unsecured debt ratings remained stable.
The agency said it assigned the parent company a notional baseline credit assessment after taking into account the group's low asset risk, stable core earnings and strong capital levels. Moody's, however, expects problem loan impairments to increase.