Icelandic bank Landsbanki is set to sell its 35% stake in department store chain House of Fraser, according to reports.

The Financial Mail on Sunday cited sources close to Landsbanki which said talks to divest the stake were at an early stage.

Private equity and sovereign wealth funds could snap up the shares in the department store, which has 61 stores in Britain and Republic of Ireland. It was also reported that the group’s management team, including chairman Don McCarthy and chief executive John King, could buy the 35% holding.

Nationalised Icelandic bank Landsbanki acquired the House of Fraser stake after the collapse of Icelandic investment group Baugur in 2009.