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Rating Action:

Moody's downgrades two UK building societies and affirms the ratings of three other lenders

30 Apr 2020

London, 30 April 2020 -- Moody's Investors Service (Moody's) today took rating actions on five UK lenders: it downgraded the Baseline Credit Assessment (BCA) and all long-term ratings of Nationwide Building Society (Nationwide) and Nottingham Building Society (Nottingham), and it affirmed the BCA and all ratings of Principality Building Society (Principality) and TSB Bank plc (TSB), and it affirmed the BCA, deposit and issuer ratings of Tesco Personal Finance plc (Tesco Bank).

The outlooks on the long-term deposit and senior unsecured debt ratings of Principality were changed to negative from stable, the outlooks on the long-term deposit and issuer ratings of Tesco Bank to stable from positive, and the outlooks on the long-term deposit ratings of Nottingham and TSB remain negative. The outlook on Nationwide's long-term deposit ratings was changed to stable from negative, while the outlook on its senior unsecured debt rating remains negative.

Moody's said that today's actions on UK lenders reflects pre-existing financial pressure for the affected issuers, likely exacerbated by the coronavirus outbreak.

A full list of affected ratings can be found at the end of this press release.

RATINGS RATIONALE

The UK is one of the countries facing a severe and extensive credit shock from the rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines. Moody's expects the banking sector to be affected by the shock through weaker profitability and asset quality.

Prior to the outbreak of the coronavirus, Moody's had already expected a weakening operating environment in the UK and deteriorating asset quality and profitability, which in turn drove a negative outlook on the long-term deposit and senior unsecured debt rating of many lenders, including many of the largest UK banks and UK ring-fenced subsidiaries, and a negative outlook on the UK banking system. Mortgage lenders were facing additional profitability challenges due to contracting margins and strong competition.

Moody's said that the coronavirus outbreak, which the rating agency regards as a social risk under its ESG framework given the substantial implications for public health and safety, will exacerbate these negative pressures. In particular, the rating agency expects a decrease in revenues due to mandatory lockdown measures, an increase in credit losses and provisions from corporate and retail clients, an increase in the inflow of new problem loans, and a further contraction in net interest margins. Moody's expects that UK banks and building societies will maintain strong capital and liquidity despite these negative pressures, based on the rating agency's current macroeconomic forecasts (see 28 April 2020 update of Global Macro Outlook 2020-21: Global recession is deepening rapidly as restrictions exact high economic cost, https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1212762).

The Bank of England and the UK Treasury have taken a series of unprecedented direct and indirect measures to support the economy including business tax relief, grants and guaranteed loans for small and medium sized corporates and a commercial paper facility available to large rated corporates as well as capped payments of wages for furloughed workers and for the self-employed. In addition, the Prudential Regulation Authority and the Financial Conduct Authority have issued guidance relaxing capital and liquidity buffer requirements, and they instructed banks and non-bank lenders to provide payment holidays on mortgages, credit cards and various forms of personal loans to previously performing customers now affected by the coronavirus crisis. Moody's believes that these measures will help to limit the likely deterioration of banks' asset quality and profitability. However, these measures will unlikely be sufficient to offset the higher credit risk triggered by a prolonged coronavirus-induced slowdown in economic activity. For this reason, the rating agency maintains a negative outlook on the UK banking system and on several ratings of UK lenders not affected by this action.

One of the measures taken by the Bank of England was to lower the base rate twice: to 0.25% from 0.75%[1] and subsequently to 0.1%[2]. These reductions will help to reduce asset quality deterioration for UK banks and building societies. A new term funding scheme from the Bank of England giving banks access to cheap rates will only partially offset the additional margin contraction driven by the lower base rate.

SPECIFIC ANALYTICAL FACTORS FOR THE AFFECTED BANKS

NATIONWIDE BUILDING SOCIETY

-- BCA AND RATINGS

Moody's downgraded the BCA of Nationwide Building Society (Nationwide) to baa1 from a3, reflecting the rating agency's expectations that the decline in the society's profitability in recent years is now unlikely to be reversed. Problem loans are currently very low but asset quality will deteriorate in light of the economic shock caused by the spread of coronavirus. The society has good loss absorption capacity given high risk-weighted capital ratios, offset by weaker leverage metrics and a concentration of revenue and risks in UK residential mortgages.

The downgrade of Nationwide's long-term deposit and senior unsecured debt ratings to A1 from Aa3, and junior senior unsecured debt rating to Baa2 from Baa1, reflect (1) the downgrade of the BCA; (2) unchanged very low loss-given-failure for depositors and senior bondholders, resulting in a two-notch uplift from the BCA, and high loss-given-failure for the junior senior unsecured and subordinate bondholders, resulting in ratings one-notch below the BCA; and (3) a moderate probability of government support for depositors and senior unsecured debt, resulting in a further one-notch uplift.

-- OUTLOOK

Moody's maintained a negative outlook on Nationwide's senior unsecured debt ratings, reflecting the risk that the society issues less debt than envisaged under its current funding plan, resulting in lower protection for senior unsecured bondholders in the medium term. The outlook on Nationwide's long-term deposit rating is now stable, reflecting the rating agency's expectation that the society's asset quality and risk-weighted capitalisation will, despite some deterioration, remain strong under Moody's current macroeconomic forecasts and in line with the baa1 BCA.

-- FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Nationwide's BCA could be upgraded if (1) the prospects for the UK's economy and institutions were to stabilise or improve; (2) Nationwide's profitability improved; and (3) the society increased its stock of high-quality liquid assets.

An upgrade of the BCA would likely result in an upgrade of all long-term ratings of Nationwide.

A downgrade of Nationwide's BCA could be driven by (1) a deterioration of the UK operating environment beyond Moody's current expectations, or (2) a sharp deterioration in the society's stock of problem loans, leverage or profitability.

A downgrade of the BCA would result in a downgrade of all long-term ratings of Nationwide. Furthermore, the senior unsecured debt rating would be downgraded if Nationwide issued less debt than envisaged under its current funding plan.

NOTTINGHAM BUILDING SOCIETY

-- BCA AND RATINGS

Moody's downgraded the BCA of Nottingham Building Society (Nottingham) to baa2 from baa1, reflecting the rating agency's view that Nottingham's weakening profitability is unlikely to recover to the historical levels, due to structural challenges stemming from the society's limited scale. The recent reduction in revenues among mortgage lenders, brought about by the low interest rate environment and intense competition in the mortgage market, has had a particularly negative impact on Nottingham's profitability, as compared to peers.

Nottingham's credit profile is supported by its excellent asset quality, with the loan book concentrated in high-quality prime mortgages, as well as its solid capitalisation, particularly given the low risk profile of the loan portfolio, and a concentration of revenue and risks in UK residential mortgages.

The downgrade of Nottingham's long-term deposit ratings to Baa2 from Baa1 reflects: (1) the downgrade of the BCA to baa2 from baa1; (2) moderate loss-given-failure for depositors, which does not result in any uplift from the BCA; and (3) a low probability of government support, which does not result in any uplift.

-- OUTLOOK

The negative outlook on Nottingham's long-term deposit ratings reflects Moody's view that Nottingham's profitability may deteriorate further given the continued decline in its loan book.

-- FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

A rating upgrade is unlikely given the negative outlook. The outlook could return to stable if Nottingham stabilises its profitability and improves its operating efficiency, while maintaining strong asset quality, as well as solid capitalisation and liquidity and funding profiles.

Nottingham's BCA could be downgraded in the event of (1) a deterioration of the UK operating environment beyond Moody's current expectations; or (2) continued weakening of the society's profitability, as well as deterioration in asset quality, capitalisation, or its funding structure and liquidity position. A downgrade of the society's BCA would likely result in a downgrade of all ratings.

Nottingham's deposit ratings could also be downgraded in response to a reduction in the volume of debt or deposits that could be bailed in, which would increase the loss-given-failure for these instruments.

PRINCIPALITY BUILDING SOCIETY

-- BCA AND RATINGS

Moody's affirmed the BCA and all ratings and assessments of Principality Building Society (Principality).

The affirmation of Principality's BCA of baa2 reflects the society's solid financial performance, notwithstanding the profitability challenges currently experienced by the mortgage lending sector. The affirmation of the BCA also reflects the continued progress Principality has made in reducing its legacy second-charge loan portfolio, but also the existence of a commercial loan book, comprising residential and commercial property exposures. The latter exposes the society to increased risks as a result of the business disruption and economic shocks caused by the coronavirus crisis. Also incorporated in Principality's baa2 BCA is its strong capitalisation and concentration of revenue and risks in UK residential mortgages.

The Baa2 deposit and senior unsecured debt ratings reflect (1) Principality's baa2 BCA; (2) moderate loss-given-failure for depositors and senior bondholders, which does not result in any uplift; and (3) low probability of government support, which also does not result in any uplift.

-- OUTLOOK

Moody's changed the outlook on Principality's long-term deposit and senior unsecured debt ratings to negative from stable, reflecting the rating agency's view that the society's exposure to commercial real estate could result in additional asset quality deterioration in the current economic environment in addition to that driven by weakening credit in its mortgage book, leading to higher credit losses.

-- FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

A rating upgrade is unlikely given the negative outlook. The outlook could return to stable if Principality demonstrates solid financial performance over the next 12-18 months, without a meaningful deterioration in asset quality and profitability, while maintaining solid capitalisation, liquidity and funding.

Principality's BCA could be downgraded in the event of (1) a deterioration in profitability and asset quality beyond Moody's expectations, and (2) a deterioration in capitalisation or in its funding structure and liquidity position. A downgrade of the society's BCA would likely result in a downgrade of all ratings.

Principality's long-term senior unsecured debt and deposit ratings could also be downgraded in response to a reduction in the volume of debt or deposits that could be bailed in, which would increase loss-given-failure for these instruments.

TESCO PERSONAL FINANCE PLC

-- BCA AND RATINGS

Moody's affirmed the BCA, Adjusted BCA, and deposit and issuer ratings of Tesco Personal Finance plc (Tesco Bank) and all rating of its holding company Tesco Personal Finance Group plc (Tesco Bank Group). At the same time, Moody's downgraded by a notch Tesco Bank's long-term Counterparty Risk (CR) Ratings and CR Assessment.

The affirmation of Tesco Bank's BCA and deposit and issuer ratings reflects (1) the BCA of baa1, underpinned by the bank's very strong capitalisation that provides protection against the lower profitability and weaker asset quality resulting from the economic shock generated by the spread of the coronavirus in the UK; (2) unchanged results of Moody's forward-looking Advanced Loss Given Failure (LGF) analysis, implying moderate loss-given-failure for Tesco Bank's depositors and holders of senior unsecured bank debt, resulting in long-term deposit and issuer ratings in line with the BCA, as well as a high loss-given-failure for holders of structurally subordinated senior unsecured debt issued by Tesco Bank Group, resulting in ratings one notch below Tesco Bank's BCA; and (3) a low probability of government support, also unchanged, which does not result in any uplift. As part of this rating action, Moody's downgraded by a notch Tesco Bank's long-term CR Ratings to Baa1 from A3 and CR Assessment to A3(cr)/P-2(cr) from A2(cr)/P-1(cr) due to Tesco Bank's revised funding plan which incorporates lower debt issuance volumes than previously assumed resulting in reduced subordination for senior ratings.

-- OUTLOOK

Moody's changed to stable from positive the outlook on the long-term deposit and issuer ratings. The outlook change reflects Tesco Bank's revised funding plans which incorporate lower debt issuance volumes than previously assumed resulting in an elimination of the upward pressure on the senior ratings per Moody's Advanced LGF analysis. The stable outlook reflects Moody's expectation that Tesco Bank will continue to perform in line with its baa1 financial profile, despite pressures on profitability and asset quality due to the expected weakening in the UK's operating environment.

-- FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Tesco Bank's deposit and issuer ratings could be upgraded because of (1) an upgrade of the bank's BCA due to improvement in the financial indicators of the bank, in particular in its solvency and liquidity; or (2) the issuance of a large amount of senior or subordinated bail-in-able debt by the bank or by its holding company. An upgrade of the BCA is conditional upon an upgrade of the weaker credit standing of its parent, Tesco Plc. Currently, Tesco Bank's BCA is positioned in line with the bank's financial profile and at the upper limit of the two notch differential that Moody's considers consistent with the strong commercial links with Tesco Plc (long-term rating of Baa3, stable).

Tesco Bank's BCA could be downgraded if the rating of Tesco Plc were to be downgraded. Tesco Bank's BCA could also be downgraded as a result of (1) a deterioration in its asset quality and profitability beyond Moody's expectations; and (2) a significant deterioration in its liquidity and funding metrics. A lower BCA would likely lead to a downgrade of all the ratings. The ratings could also be downgraded should its unsecured debt decline relative to the bank's total balance sheet, resulting in higher loss-given-failure for unsecured creditors.

TSB BANK PLC

-- BCA AND RATINGS

Moody's affirmed all ratings of TSB Bank plc (TSB) and TSB Banking Group plc (TSB Group). Moody's also affirmed TSB's BCA and Adjusted BCA at baa2, as well as its CR Assessments at A3(cr)/P-2(cr).

The affirmation of TSB's baa2 BCA reflects the bank's: (1) high quality loan portfolio, consisting mostly of mortgages; (2) weak profitability given the large inherited cost base; (3) solid risk-based capital levels; (4) large proportion of retail deposits in its funding profile and a large stack of liquid assets; and (5) concentration of revenue and risks in UK residential mortgages. Moody's believes that the bank's revised strategy focusing on cost containment will support its future profitability. In addition, the operational and execution risk related to TSB's IT migration challenges in 2018 has materially lessened, as the bank reorganised its management structure and IT governance, and subsequently demonstrated successful client management and improved customer satisfaction. Moody's also believes that the tail risk stemming from potential regulatory actions related to the IT migration will be manageable for TSB, given its solid capitalisation, as well as potential recoveries under insurance claims.

TSB's BCA of baa2 exceeds the BCA of its parent Banco Sabadell, S.A. (Sabadell, deposit rating Baa2, senior unsecured debt Baa3 stable, BCA ba2) by three notches. This differential reflects the very limited connections between the two institutions, plans to retain the TSB brand name, and expectations that the UK Prudential Regulation Authority will continue to ensure that TSB maintains solid capitalisation and strong liquidity, before any dividends are allowed to be paid.

The Baa2 long-term bank deposit and issuer ratings of TSB, as well as the Baa3 issuer rating and subordinated debt rating of TSB Group, are underpinned by (1) TSB's BCA of baa2; (2) the results of Moody's LGF analysis, which lead to no uplift for TSB's ratings and a negative one-notch adjustment from the BCA to the ratings of TSB Group; (3) and our assumption of a low probability of government support, resulting in no further rating uplift.

-- OUTLOOK

The negative outlook reflects Moody's expectation that TSB's profitability will remain under pressure, as the bank continues executing on its strategic plan, which includes optimising its cost structure with branch closures and other budget initiatives, as well as investments in its technology platform. Moody's believes that pressures on TSB's profitability will be further exacerbated by the economic shock generated by the spread of the coronavirus in the UK, likely resulting in reduced revenues, an increase in loan losses and increased provisions.

-- FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

TSB's BCA is unlikely to be upgraded given the negative outlook. The outlook could be revised to stable if the banks improved and stabilised its profitability, while maintaining solid asset quality and capitalisation, with no deterioration in its liquidity and funding profile.

TSB's deposit and issuer ratings could also be upgraded if the bank were to issue significant amounts of long-term debt, including structurally subordinated debt issued through its holding company.

TSB's BCA could be downgraded if the bank's profitability and asset quality prove to be materially weaker than anticipated by Moody's, or if the bank's weak profitability during the period of its strategic repositioning were accompanied by a meaningful reduction in capitalization. TSB's BCA could also be downgraded if Sabadell's BCA were downgraded. A downward movement in TSB's BCA would likely result in a downgrade of all its ratings. TSB's deposit and issuer ratings could also be downgraded in response to a reduction in the volume of its deposits or debt that could be bailed in, which would increase the loss-given-failure for depositors.

Any increase in the interdependence between TSB and its parent, in the absence of an upgrade of Sabadell's BCA, could result in negative pressure on TSB's ratings.

LIST OF AFFECTED RATINGS

Issuer: Nationwide Building Society

Downgrades:

....Long-term Counterparty Risk Ratings, downgraded to Aa3 from Aa2

....Long-term Bank Deposits, downgraded to A1 from Aa3, outlook changed to Stable from Negative

....Long-term Counterparty Risk Assessment, downgraded to Aa3(cr) from Aa2(cr)

....Baseline Credit Assessment, downgraded to baa1 from a3

....Adjusted Baseline Credit Assessment, downgraded to baa1 from a3

....Senior Unsecured Regular Bond/Debenture, downgraded to A1 from Aa3, outlook remains Negative

....Commercial Paper/Certificate of Deposit Programme, downgraded to A1 from Aa3

....Senior Unsecured Medium-Term Note Program, downgraded to (P)A1 from (P)Aa3

....Junior Senior Unsecured Regular Bond/Debenture, downgraded to Baa2 from Baa1

....Junior Senior Unsecured Medium-Term Note Program, downgraded to (P)Baa2 from (P)Baa1

....Subordinate Regular Bond/Debenture, downgraded to Baa2 from Baa1

....Subordinate Medium-Term Note Program, downgraded to (P)Baa2 from (P)Baa1

....Preferred Stock Non-cumulative, downgraded to Ba1(hyb) from Baa3(hyb)

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed P-1

....Short-term Bank Deposits, affirmed P-1

....Short-term Counterparty Risk Assessment, affirmed P-1(cr)

....Commercial Paper, affirmed P-1

....Other Short Term, affirmed (P)P-1

..Outlook Action:

....Outlook changed to Stable(m) from Negative

Issuer: Cheshire Building Society

..Downgrade:

....Backed Preferred Stock Non-cumulative, downgraded to Ba1(hyb) from Baa3(hyb)

..No Outlook assigned

Issuer: Portman Building Society

..Downgrades:

....Backed Preferred Stock Non-cumulative, downgraded to Ba1(hyb) from Baa3(hyb)

..No Outlook assigned

Issuer: Nottingham Building Society

..Downgrades:

....Long-term Counterparty Risk Ratings, downgraded to Baa1 from A3

....Long-term Bank Deposits, downgraded to Baa2 from Baa1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to A3(cr) from A2(cr)

....Short-term Counterparty Risk Assessment, downgraded to P-2(cr) from P-1(cr)

....Baseline Credit Assessment, downgraded to baa2 from baa1

....Adjusted Baseline Credit Assessment, downgraded to baa2 from baa1

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed P-2

....Short-term Bank Deposits, affirmed P-2

..Outlook Action:

....Outlook remains Negative

Issuer: Principality Building Society

..Affirmations:

....Long-term Counterparty Risk Ratings, affirmed A2

....Short-term Counterparty Risk Ratings, affirmed P-1

....Long-term Bank Deposits, affirmed Baa2, outlook changed to Negative from Stable

....Short-term Bank Deposits, affirmed P-2

....Long-term Counterparty Risk Assessment, affirmed A2(cr)

....Short-term Counterparty Risk Assessment, affirmed P-1(cr)

....Baseline Credit Assessment, affirmed baa2

....Adjusted Baseline Credit Assessment, affirmed baa2

....Senior Unsecured Regular Bond/Debenture, affirmed Baa2, outlook changed to Negative from Stable

....Senior Unsecured Medium-Term Note Program, affirmed (P)Baa2

....Subordinate Medium-Term Note Program, affirmed (P)Baa3

....Preferred Stock Non-cumulative, affirmed Ba2(hyb)

....Other Short Term, affirmed (P)P-2

..Outlook Action:

....Outlook changed to Negative from Stable

Issuer: Tesco Personal Finance Group plc

..Affirmations:

....Long-term Issuer Ratings, affirmed Baa2, outlook changed to Stable from Positive

....Short-term Issuer Ratings, affirmed P-2

....Senior Unsecured Regular Bond/Debenture, affirmed Baa2, outlook changed to Stable from Positive

....Senior Unsecured Medium-Term Note Program, affirmed (P)Baa2

..Outlook Action:

....Outlook changed to Stable from Positive

Issuer: Tesco Personal Finance plc

..Downgrades:

....Long-term Counterparty Risk Ratings, downgraded to Baa1 from A3

....Long-term Counterparty Risk Assessment, downgraded to A3(cr) from A2(cr)

....Short-term Counterparty Risk Assessment, downgraded to P-2(cr) from P-1(cr)

..Affirmations:

....Short-term Counterparty Risk Ratings, affirmed P-2

....Long-term Bank Deposits, affirmed Baa1, outlook changed to Stable from Positive

....Short-term Bank Deposits, affirmed P-2

....Long-term Issuer Rating, affirmed Baa1, outlook changed to Stable from Positive

....Short-term Issuer Rating, affirmed P-2

....Baseline Credit Assessment affirmed baa1

....Adjusted Baseline Credit Assessment, affirmed baa1

..Outlook Action:

....Outlook changed to Stable from Positive

Issuer: TSB Banking Group plc

..Affirmations:

....Long-term Issuer Rating, affirmed Baa3, outlook remains Negative

....Subordinate Regular Bond/Debenture, affirmed Baa3

..Outlook Action:

....Outlook remains Negative

Issuer: TSB Bank plc

..Affirmations:

....Long-term Counterparty Risk Ratings, affirmed Baa1

....Short-term Counterparty Risk Ratings, affirmed P-2

....Long-term Bank Deposits, affirmed Baa2, outlook remains Negative

....Short-term Bank Deposits, affirmed P-2

....Long-term Counterparty Risk Assessment, affirmed A3(cr)

....Short-term Counterparty Risk Assessment , Affirmed P-2(cr)

....Long-term Issuer Rating, affirmed Baa2, outlook remains Negative

....Baseline Credit Assessment, affirmed baa2

....Adjusted Baseline Credit Assessment, affirmed baa2

..Outlook Action:

....Outlook remains Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

At least one ESG consideration was material to the credit rating action(s) announced and described above.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued the ratings.

REFERENCES/CITATIONS

[1] Bank of England 11-Mar-2020

[2] Bank of England 19-Mar-2020

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Edoardo Calandro
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Nicholas Hill
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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