According to Sky News, UK Financial Investments (UKFI) which looks after the loans on behalf of the taxpayer, has started appointing advisers to examine a possible privatisation of a significant Bradford & Bingley loan book.
Investment banks have been circulating a document regarding the potential to privatise the book.
Last year the government disposed of tens of thousands of Northern Rock mortgages worth £13bn, with a significant chunk being sold to US private equity firm Cerberus Capital Management and a smaller portion to TSB.
MPs, including Conservative and chair of the Treasury Select Committee Andrew Tyrie, criticised the sale at the time, raising concerns that Northern Rock borrowers may be adversely affected.
The government bailout package for Northern Rock during the financial crisis was £21.7bn and £27bn for Bradford & Bingley.
However, the final sale of the Bradford & Bingley book is expected to be some way off as the government completes its sale of its Northern Rock assets.
Speaking to Sky News, a source working in the City said: “This is a scoping exercise designed to look at these assets, and what the options might be and whether a privatisation might be possible.
“At this stage, it is no more than that.”