By Steve Slater
LONDON (Reuters) - Lloyds Banking Group
Former Standard Chartered
Davies is a partner at U.S. private equity firm Corsair Capital. It was too early to say how big a stake any consortium might want, the source said.
Sky News said a Corsair-led consortium of sovereign wealth funds and financial firms could buy up to 10 billion pounds ($14.9 billion) of Lloyds, or half the government's 39 percent stake.
The government has received a number of tentative enquiries about the sale, including from overseas investors, a person familiar with the matter said on Sunday.
Britain is keen to start selling its 20 billion pound holding in Lloyds this year, and dozens of top investment banks will pitch for the job of handling the sale by a Treasury deadline on Monday.
The Sunday Times said Singapore state investor Temasek
By 1030 GMT Lloyds shares were up 2.8 percent at 66.4 pence, after hitting 66.6p, their highest level since February 2011 and comfortably above the 61.2p level the government regards as its break-even price.
"Given the shares are trading at a premium to what the government paid and the capital position seems to be where it needs to be and the signs of improvement in the UK economy, everything seems to be moving in the right direction," said Gary Greenwood, analyst at Shore Capital.
"Now would seem to be a good time to kick it off (the government share sale), and if the stories about sovereign wealth funds and other interest are true then there are willing buyers."
Britain's finance minister George Osborne last month gave the green light to starting the sale of Lloyds shares soon.
Lloyds shares outpaced a 1.5 percent rise by the STOXX Europe 600 banking index <.SX7P>. The shares have jumped more than 40 percent in the last three months, valuing the bank at about $70 billion.
Shares in RBS, which is 81 percent owned by the government, rallied 4.8 percent on signs of greater interest in the state-backed banks. But bankers and analysts say a sale of Britain's stake in RBS is unlikely to occur until well into 2014 at the earliest.
($1 = 0.6719 British pounds)
(Editing by Alexander Smith and Erica Billingham)