Lloyds Banking Group PLC (LYG) Thursday said it may sell some of its investment management assets, including Bank of Scotland Portfolio Management Services, to Rathbone Brothers PLC (RAT.LN), as the part state-owned bank looks to raise money and shed some of its dependence on the U.K. government.

Lloyds, which is 43.5% owned by the U.K. government, said it is in discussions about the potential sale of "non-core client discretionary investment management activities, principally the Bank of Scotland Portfolio Management Service," without giving any details of the size or revenues of the businesses.

Analysts said the BoS Portfolio Management unit has less than GBP1 billion in assets under management, suggesting a price tag in the tens of millions of pounds. Though not directly comparable, Lloyds in August sold its Insight Investment Management unit, with GBP80 billion under management to Bank of New York Mellon Corp. (BK) for GBP235 million.

"I don't think assets under management in the division are big enough to make this deal material to the bank. But it shows Lloyds is really analyzing its operations, trying to see what is core and what isn't," said one analyst. He said the unit employs about 50 people.

According to its Web site, Bank of Scotland Portfolio Management Services manages stock portfolios and other investments for clients with GBP100,000 or more to invest.

Lloyds is in the midst of a series of decisions that will decide its future shape. The European Commission is expected to rule soon on conditions of state aid received by Lloyds, which included a GBP17 billion capital injection a year ago, and a plan to have the government insure about GBP260 billion in risky loans and investments.

The bank has been looking at ways to bypass the insurance program, though, in whole or in part, by instead raising additional capital.

Ultimately, it is expected to make a string of asset sales as it maps out a return to independence.

Lloyds shares at 0732 GMT were up 1 pence, at 94 pence, in a mixed London market.

Company Web site: http://www.lloydsbankinggroup.com

-By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com