Top banks are putting their submissions to the Treasury to run a potential £20bn sale of the nationalised part of Lloyds Bank.
Banks have until Monday to make their pitch to handle the
sell-off of the government's 39% holding in Lloyds, with the sale of
RBS, which is 81% owned by the taxpayer, to come later. The sale method has not been decided.
On Friday, BBC business editor Robert Peston said approaches had come in from some countries' sovereign wealth funds.
He said private-equity businesses had also shown interest in buying around 10% of Lloyds, either just before or simultaneous with a more conventional placing of shares with investment institutions,.
The Sunday Times reported that Temasek, the Singapore government's investment arm, is willing to buy 10% of Lloyds' shares for £4.5bn.
Temasek is a shareholder in rival UK-headquartered bank Standard Chartered.
Blocks
While the method of sell-off is being considered, UK Financial Investments (UKFI), which manages the government's shares, will pick a shortlist of banks to handle it.
Later, it will narrow down the field.
UKFI said in a statement that the move was "merely planning formally for as and when a transaction takes place" and was "by no means an indication" that something was imminent.
The Lloyds sale is expected to kick off with up to £5bn of the government's holding for sale, with a classic 1980's-style privatisation - a direct sale of the shares to retail investors - unlikely.
One method may be to offer large blocks of shares to professional, institutional buyers, or even, as our correspondent reports, sovereign wealth or private equity funds.
The Reuters news agency said on Friday that the biggest names in international banking were eager to take part, although the fee income from the sale was likely to be modest when compared with usual commercial terms.
It said banks would be keen to participate for the prestige, and mentioned HSBC, Barclays, UBS and Credit Suisse as likely to be among them.
In June, Chancellor George Osborne said the government was ready to start selling its Lloyds shares, which on Friday were trading at 64p, above the government's breakeven price of just above 61p.