Nomura, Japan’s largest brokerage, is considering taking a stake in Lehman Brothers, Japan’s Yomiuri newspaper said on Sunday.

The report cited Kenichi Watanabe, Nomura’s chief executive, saying Lehman was “one of a number of candidates” the bank is considering targeting with the more than Y200bn ($1.86bn) it has put aside for investing in western financial institutions.

Nomura said “we are always considering various options”, but declined to make additional comments on the report.

Nomura is going to make a decision following its analysis of Lehman’s share price and results for the June-August quarter, the newspaper said.

Yomiuri reported Mr Watanabe saying the company receives offers “on a daily basis” to invest in or acquire overseas financial groups.

Nomura wants to expand overseas as it aims to increase overseas revenues from 20 to 30 per cent by 2011. Although it has been more badly hit by the subprime crisis than many other Japanese financial institutions, its writedowns have been smaller than some of its overseas rivals.

Nomura has also hired bankers to examine a bid for UK broker Collins Stewart.