Singapore's sovereign wealth fund has made a preliminary approach to buy a £4.5 billion stake in Lloyds, according to the Sunday Times.
The paper says Temasek, which owns 18% of Standard Chartered, is willing to buy around 10% of the bank's shares.
The news comes as chancellor George Osborne ramps up the government's strategy to return the bank to the private sector.
The Times also suggests former trade minister and Standard Chartered chief executive Lord Davies has been trying to form a consortium to buy the government's entire 39% stake in Lloyds.
It is believed Davies, who now works for US private equity firm Corsair Capital, would be prepared to put some money up next to a selection of major investment houses and Middle East and Asian-backed sovereign wealth funds to acquire the interest.