HBOS is to offload a £400m portfolio of investments in private companies as it seeks to shrink its balance sheet and withdraw from some areas of activity.

The UK’s biggest mortgage lender, which last week reported a 72 per cent fall in interim pre-tax profits, has asked UBS to raise a fund from private investors to acquire part of HBOS’s stakes in companies such as Keepmoat, a renovator of social housing, and Ainscough, the UK’s largest crane hire operator.