Weekend reports suggested the group’s new CEO, Antonio Horta-Osorio (pictured), is poised to offload the subsidiary, possibly together with the bank’s 60% stake in wealth manager St James’s Place.

Horta-Osorio is expected to unveil the plans as part of his strategy to focus the 43% taxpayer-owned business on its core banking services, which he will present to investors at the end of June.

Possible buyers of Scottish Widows, which would face a reported price tag of between £5bn and £7bn, include the Clive Cowdery-led Resolution Group, which owns Friends Provident and Bupa’s health assurance division.

Earlier this month, Lloyds Banking Group was ordered by the European Commission to sell 600 branches and at least 4.6% of the UK personal current account market and 19.2% of its retail mortgage assets, as a condition of the state aid it has received.

Horta-Osorio recently announced plans to accelerate these sales, which include the disposal of Cheltenham & Gloucester, the TSB brand and Intelligent Finance.

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