LONDON - Aberdeen Asset Management (ADN.L) is interested in buying the funds arm of Royal Bank of Scotland (RBS.L), two sources familiar with the situation said, as the bank offloads a raft of assets after a government-backed bailout.

The deal, involving parts of the bank's asset management unit, could bring RBS up to 100 million pounds ($159.5 million), one of the sources said.

Aberdeen had been looking at the business along with a number of rival companies, a senior Aberdeen source said, dismissing a report that a deal was imminent.

It is well documented we are interested in the business. I would love to know we are the front runner, the Aberdeen source told Reuters on Thursday.

RBS declined to comment.

RBS shares were up 3 percent by 1212 GMT, while Aberdeen shares were down 0.44 percent.

The European Union is forcing RBS to sell a raft of assets after the UK government stepped in to save it from collapse in the credit crisis. Schroders (SDR.L) was another bidder in the race for the funds assets, the source familiar with the situation said.

The possible sale comes after RBS said in November it was selling its 51 percent stake in commodities trading company RBS Sempra, which it jointly owns with Sempra Energy (SRE.N). Sempra also wants to sell its part of the joint venture.

Deutsche Bank (DBKGn.DE), JPMorgan Chase (JPM.N) and Australia's Macquarie (MQG.AX) are in the race to buy RBS Sempra, a person familiar with the matter said on Monday.

Elsewhere HSBC (HSBA.L) (0005.HK) could be in the lead to acquire RBS's remaining retail and commercial units in Asia, the group's Asia-Pacific Chief Executive Officer John McCormick told Reuters in an interview in October.

United kingdom Investment Jpmorgan chase