Britain's Lloyds Banking Group said it was still looking at ways to scale back or cancel its participation in a government-backed scheme to insure it against credit losses.
Analysts and investors said, however, the part-nationalised bank would struggle to exit the asset protection scheme altogether and a lot would depend on the response of the British government and of British and EU regulators.
"There are a range of options available to us and we continue to monitor them," a Lloyds spokesman said on Thursday. "We issued a stock exchange announcement two weeks ago and our position has not changed since then."
Lloyds said on Sept. 18 it was in talks with the government and financial regulators over possible alternatives to the scheme and all options were open.
Reuters reported in August that Lloyds was gauging appetite for a bumper rights issue of as much as 20 billion pounds ($32 billion) to allow it to avoid 15.6 billion in fees it would have to pay in order to take part in the scheme.
The Financial Times newspaper reported on Thursday that Lloyds was sounding out investors about a 15 billion pound rights issue to bolster its capital and help it avoid the scheme.
Lloyds shares were down 2.4 percent at 93.4 pence at 0915 GMT, the biggest faller in the blue-chip FTSE 100 index.
On Wednesday, Sky News reported the bank had presented Britain's Financial Services Authority with a plan to raise a total of 25 billion pounds through a rights issue, asset disposals, and other measures.
Analysts at Credit Suisse said they believed it was feasible for Lloyds to raise 25 billion pounds with 15 billion coming from a rights issue and 10 billion from asset sales and management of existing liabilities.
Its calculations assumed a cash-strapped British government, which owns 43 percent of Lloyds and faces a general election by next June, would stump up another 6 billion pounds.
Other risks include how European regulators respond to any reduction in state support. The European Union's antitrust chief Neelie Kroes said last month Lloyds would need to shrink its activities to compensate for its bailout by the British government.
"The big question, then, would be how the EC (European Commission) responds to a reduced level of state-aid," Credit Suisse analysts said in a note to clients.
