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Lloyds deal to sell branches to Co-operative Group collapses; opts for flotation instead

LONDON – Lloyds Banking Banking Group says a mulitmillion pound deal to sell hundreds of branches to Co-operative Group has unraveled.

Part-nationalized Lloyds had been ordered to sell part of its network to comply with the European Commission’s terms for receiving a government bailout. The bank, which is 40 per cent owned by taxpayers, said in a statement Wednesday that it will now pursue a stock market flotation for the branches.

Co-op blamed the current economic environment and “the worsened outlook for economic growth and the increasing regulatory requirements” on financial services.

Antonio Horta-Osorio, the chief executive of Lloyds, says he’s disappointed that the Co-op was unable to complete the transaction, but that the business and its 630 branches will be “a real challenger on the high street.”