A phoney war may be underway between the more serious of the prospective bidders for the portfolio of branches being sold in the UK by Lloyds Banking Group.Two more reports in the UK media yesterday (in The Daily Telegraph and The Times) each backed up last week's report in The Guardian that National Australia Bank has demurred on making a bid and asked for more time.The two most recent reports are also split on whether or not Virgin Money made a bid, though, as with NAB and some other bidders, the reports suggest Virgin wants Lloyds to improve the terms of the bid.The Times reported that one scenario under discussion between interested bidders and Lloyds is a cut in the level of loans being sold in order to make the assets sold closer in value to the liabilities being sold.Last month, Lloyds put these, in round figures, at £64 billion in assets and £32 billion in liabilities.The Financial Review reported today that NAB has asked Lloyds for a change in the mix of assets and liabilities.The AFR article also suggested that NAB considered itself "Lloyds' preferred bidder".