Banks have until Monday to bid for rights to handle sale of government's Lloyds and RBS stakes

Over a dozen banks are finalising a £20bn share sale in Lloyds, with pitches due by Monday to handle the sale of the government's 39 per cent holding, followed by the sale of its 81 per cent stake in Royal Bank of Scotland, according to UK Financial Investments (UKFI).

UKFI are then expected to shortlist eight banks to handle the sale at short notice. Fees are likely to be low, as government work brings in less than private deals.

"There's more honour at stake than there is money," said one senior investment banker involved in the process.