Improvements at state-backed Lloyds see S&P upgrade rating - Now Osborne has to sell the rest

Ratings agencies seem a bit happier with Lloyds.

While they struggle to deal with the way in which the bank is backed by the government, and accordingly the institution's headline ratings can be a misguiding - Lloyds' remains unchanged at A - other improvements at Lloyds are being recognised in another form.

Standard & Poor's (S&P) have revised their assessment of Lloyds' stand-alone credit profile to "bbb+" from "bbb".

That rating reflects the changes being made at Lloyds, and its readiness as an institution free of government support. S&P state that "Lloyds' capitalisation has strengthened, and that prospects are better for the bank's statutory earnings."

While most expect the bank out of government hands entirely by the next general election in 2015, the longer that it remains under part-state ownership, the longer that decision making will be dulled by political influence.

Chancellor George Osborne has already let a bit of the bank be reprivatised. This upgrade is a sign that more can go.