Lloyds' Co-op deal collapse 'not a huge surprise'

The planned sale of 632 UK bank branches by Lloyds Banking Group to the Co-operative Group has fallen through.

The Co-op blamed the continued economic downturn and tougher regulatory environment imposed on banks.

Lloyds said it will now seek to sell the branches as a stand-alone bank through a stock market listing.

Douglas Blakey, Editor of Retail Banker International, gave his reaction to the BBC's Ben Thompson.