MOODY'S ASSIGNS Aa3/P-1 RATINGS TO TSB BANK PLC FOR LONG- AND SHORT-TERM DEPOSITS
New York, 06-22-95 -- Moody's Investors Service assigned Aa3/Prime-1 ratings to TSB Bank plc for long- and short-term deposits. The bank is controlled by TSB Group plc, which is the parent company of the banking group. Moody's said that the ratings are based on the group's strong financial fundamentals -- including healthy capitalization and good profitability -- as well as on its prominent franchise as provider of combined banking and insurance products in the United Kingdom. The ratings also reflect Moody's expectation that the group will continue to focus on maintaining and developing its core domestic businesses, but also the belief that the increasingly competitive UK banking environment will represent a growing challenge for TSB's profitability.
The TSB Group was created from the combination of formerly state regulated Trustee Savings Banks. Its branch network is distributed across the United Kingdom, but has heavier market share in the north of England and Scotland. TSB benefits from a comparatively large customer base, into which it has extensive experience of selling a range of retail financial products. Following its privatization and flotation on the London stock exchange in 1986, TSB diversified by acquiring a number of businesses, one of which, Hill Samuel, forms the basis of its ongoing merchant banking activities. The group has undergone significant restructuring in recent years, following credit losses earlier in the decade. It is now concentrated on retail banking and insurance -- the main contributor to group profitability -- and is engaged in complementary activities, in merchant banking, and consumer related asset-backed finance.
TSB Group plc's relatively strong net interest margin and preprovision profitability reflect its emphasis on U.K. personal banking and its important insurance and savings franchise. It is also well capitalized, with a Tier 1 ratio of 9.4% as of October 1994.
TSB Bank plc is headquartered in London and had total assets at 31 October 1994 of GBP 27.5 billion (approximately US$ 43 billion). The bank's ultimate holding company is TSB Group plc.
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