Temasek, the giant sovereign wealth fund of Singapore is planning to acquire a large stake in Lloyds Banking Group plc (ADR) (NYSE:LYG).

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The Australian reported that Temasek, which is one of the biggest investors in the financial services sector, approached the British government regarding its plan to purchase a 10 percent stake or  £4.5 billion worth of shares of Lloyds Banking Group plc (ADR) (NYSE:LYG).

The British government owns a 39 percent stake in Lloyds Banking Group Plc (ADR) (NYSE:LYG). Last month, UK Financial Investments invited investment banks to submit proposals to manage the sale of the governments’ stake in Lloyds and Royal Bank of Scotland Group plc (ADR) (NYSE:RBS).

The report stated that the existing institutional investors of Lloyds Banking Group plc (ADR) (NYSE:LYD) could sell a small tranche of shares of the bank within weeks, and further sales to the public are expected to follow.

Reuters Reports Temasek Did Not Approach Lloyds

A related report from Reuters stated that Temasek did not approach the British government regarding a plan to acquired £4.5 billion in Lloyds Banking Group plc (ADR) (NYSE:LYG), citing sources within the industry.

However, one of the sources told Reuters that the British government received tentative inquiries regarding the sale of its stake in the bank with an approximate value of £20 billion. The report claimed that Mervyn Davies, former CEO of Standard Chartered plc (LON:STAN), could be among the bidders. Davies was forming a group of sovereign wealth funds and financial institutions to buy as much as 50 percent of Britain’s stake in Lloyds.

It is also possible that Temasek could be a part of the group of investors led by Davies based on its previous statement regarding future investments. During its annual review last Thursday, Temasek commented, “We are … seeing increasing opportunities in the United States and Europe that are beneficiaries of the growth in other geographies, and are likely to step up our pace of investments in these markets.”

According to Bloomberg, Davies is working with Corsair Capital Llc, a private equity firm based in New York. He also approached Standard Life plc (LON:SL) regarding the plan to acquire some of the shares owned by the British government in Lloyds Banking Group plc (ADR) (NYSE:LYG).

Last March, Lloyds Banking Group plc (ADR) (NYSE:LYG) recorded a net loss of £1.4 billion, lower than its net loss in 2011. The bank’s CEO, António Horta-Osório, previously stated that his objective is to return taxpayers money.