Lehman set for three-way break up: paper

The exterior of the world headquarters for Lehman Brothers is seen in New York September 12, 2008.

LONDON (Reuters) - Bank of America, Barclays and Goldman Sachs are expected to agree a deal as early as Sunday to buy stricken U.S. investment bank Lehman Brothers, Britain's Sunday Express reported.

The newspaper, without citing sources, said Bank of America would acquire the bulk of Lehman Brothers, including its mortgage assets.

Barclays, Britain's third-biggest bank, would take a smaller parcel including Lehman's asset management and fixed income businesses, while Goldman would take the rest, it said.

Barclays declined to comment. Goldman, Bank of America and Lehman Brothers could not immediately be reached.

The Sunday Express said the success of the plan depended on U.S. Treasury Secretary Hank Paulson hammering out a deal to get funding from wall Street's financial institutions.

Lehman has written down billions of dollars in assets in the last year, largely holdings of complex mortgage-backed securities, and over the last several months, it has been battling rumors of defecting clients and talk of a discounted takeover, leading to steep falls in its share price last week.

(Reporting by Mark Potter; Editing by Richard Hubbard)