Royal Bank of Canada considered buying Lehman Brothers in July, but decided against the move because it doubted the U.S. bank's ability to shore up its balance sheet, the Financial Times reported on Monday. RBC decided against buying Lehman because it was worried about the assets on the balance sheet and "about what we would have to promise the Lehman people," an RBC executive said, according to the report.

State-controlled Korean Development Bank has said it is in talks with Lehman about investing in the bank, along with other South Korean banks.

Lehman announced a management shake-up on Sunday.

The investment bank has already taken $7 billion in credit-related write-downs and losses since the start of the global credit crisis and it is expected to announce further losses when it releases its quarterly results.