Moody's reviews UK banks for possible

downgrade
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Fourteen UK banks and building societies have been told that their credit ratings
may be cut because of the withdrawal of government support.

Moody's said on Tuesday it was reviewing banks including Lloyds and Royal Bank of
Scotland, hitting the share prices of both firms.

Moody's sees less government support as possibly weakening the creditworthiness of

some financial institutions.

A downgrade would raise borrowing costs for banks and building societies.

The Bank of England has already said that an emergency funding line - the Special
Liquidity Scheme - will not be rolled over when it expires in January 2012.

Elisabeth Rudman, a Moody's senior credit officer, said: "The reassessment is not driven
by either a deterioration in the financial strength of the banking system or that of the
government."

"It has been initiated in response to ongoing guidance from the UK authorities - the Bank
of England, the Financial Services Authority and the Treasury."

The agency said that current levels of state support for the financial sector adds two to five
notches of ratings uplift for the large UK banks and one to five notches of uplift for the
smaller firms.

The ratings of Barclays and HSBC were not placed on review by Moody's.
Shares in Lloyds and RBS fell about 1%, but recovered slightly after the initial surprise at
Moody's announcement subsided.