Aberdeen Asset Management is in preliminary talks with Lloyds Banking Group over a sale of Scottish Widows Investment Partnership (Swip), which manages more than £140 billion on behalf of investors.

The deal, which will issue new shares to Lloyds, might end up with a 10% stake in Aberdeen if it is successful.

The Swip deal is expected to cost between £400 and £500 million for the buyer.

Through the deal, Aberdeen with more than £200 billion of funds under management and a market capitalisation of £5 billion, hopes to increase its scale significantly.

Lloyds has been seeking for a buyer for Swip in a move to raise funds and resume its dividend, which has been suspended since mid-2008.

The Swip sale would be completed next year, while Lloyds is expected to accept a bidder within weeks.