News release: “The outlook for the UK banking system remains negative, says Moody’s Investors Service in a new Banking System Outlook published today. The key drivers of the negative outlook are (1) the UK’s uncertain economic prospects; (2) downside risks for asset-quality; and (3) pressure on profitability due to net interest margin pressure, weak credit growth, and higher regulatory and compliance costs. The new report, entitled “Banking System Outlook: United Kingdom,” is now available on www.moodys.com ($). Moody’s subscribers can access this report via the link provided at the end of this press release…Moody’s continued view is that the probability of government support for systemically important institutions will decline over the medium-term as authorities move towards implementing new recovery and resolution frameworks. This is reflected in a negative outlook on the senior debt and deposit ratings of the largest banks, which currently all incorporate very high assumptions of government support. However, Moody’s has a stable outlook on the standalone financial strength ratings of most banks and building societies, reflecting the fact that their standalone ratings incorporate to a certain extent the risks highlighted above. Moody’s says that the weak economic growth prospects over the 12-18 month outlook period imply that the operating environment for UK banks will remain challenging. As previously noted in August, Moody’s expects UK economic growth to be marginally positive, although Moody’s central growth projection ranges from between -0.5% and 0.5% in 2012, with the macro-economic downside risks outweighing any positive factors.”