The Sunday Times reported that the bank’s 60% holding could be placed with investors on the market before the end of 2012.
The news comes with Lloyds locked in talks with the Financial Services Authority (FSA) about paying a dividend. It is understood the regulator is reluctant for the bank to resume the payout - which has been suspended since the start of the financial crisis five years ago -unless the bank's capital position strengthens.
The paper reported that Lloyds’ strategy director Antonio Lorenzo is heading the disposal plan, which could have the potential to raise enough cash to allay the FSA's concerns.
The paper said the sale of Lloyds’ stake in SJP was ‘not imminent’ but ‘under active consideration’.
Lloyds has clung onto the stake in the profitable wealth management business amid regulatory to pressure to sell non-core units in the wake of the credit crisis.
At the start of last year, reports suggested the bank was looking for a buyer for the stake as new chief executive Antonio Horta-Osorio launched his strategic review.
SJP subsequently got backing from Lloyds after its chief executive David Bellamy demanded clarity on Lloyds' intentions for his firm. ‘The business isn’t impacted, investors and clients don’t do things because of the shareholders. I don’t think it will impact, but it will take away uncertainty and distraction, and we want it resolved,’ Bellamy said in May 2011.
According to the Sunday Times, Lloyds has sounded out SJP chief executive David Bellamy (pictured) about a possible sale.
Numbers from SJP last week underlined the firm's strength, with assets under management moving towards the £33 billion mark.
The results impressed Investec Securities, which repeated its buy rating on the stock while underlining the firm's unique position in the market.
'[SJP] is growing because it is mining the mass affluent niche that is largely ignored by competitors and, uniquely, it has an internal sales force. The latter is RDR compliant and the fall-out from RDR should make it easier to recruit high quality sales people,' Investec analyst Kevin Ryan said in a note on the stock.
However, not all are as confident about SJP's prospects after it emerged that BlackRock had opened a short position on the stock.
At 8.30am shares in Lloyds were 1.74%, or 0.76p lighter at 42.67p, while SJP was off 6.2p, or 1.56%, at 392.3p.