Shares in British banks were broadly up on the FTSE 100 in morning trading following a report that the British government is considering selling its stakes in Lloyds Banking Group and RBS.

The government currently owns over 40 per cent of Lloyds Banking Group and more than 80 per cent of RBS.

A report from Bloomberg quoted four people, described as being familiar with the matter, as saying that the sell off of the government stakes may begin early next year.

Lloyds Banking Group is said to be better prepared for the sell off and so is likely to be the first of the part nationalised banks to make its way fully into the private sector.

RBS is more likely to have its shares sold back into private hands by the end of 2014.

By 10:00 shares in Lloyds Banking Group were down 0.15 per cent to 60.15 pence per share.

However RBS shares were up 1.01 per cent to 41.84 pence per share, Barclays shares rose 1.08 per cent to 290.35 pence per share and HSBC shares climbed 0.48 per cent to 634.30 pence per share.

Overall the FTSE 100 was up 0.72 per cent to 5,837.60.