Shares in Lloyds TSB climbed over two per cent yesterday after a source familiar with the matter said the bank had ended talks on a possible takeover of German rivals Dresdner or Postbank.

At 8.10 a.m. Lloyds was up 2.1 per cent at 298.75 p, outperforming a 0.86 per cent rise in the FTSE index.

Shares in Alliance & Leicester and Bradford & Bingley, both named in the past as potential targets for Lloyds and now potentially back on its radar, were up five per cent at 6.1 per cent respectively.

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