Investment banks angling for a piece of a marquee British deal are preparing to swallow a bitter pill: If they win the job, they will probably end up losing money on it.

The assignment in question involves helping the government sell a chunk of its stake in partly nationalised Lloyds Banking Group, which is likely to happen in the next couple months. The government agency managing the sale, UK Financial Investment, has privately told at least some investment banks that if they win a spot on the deal, they can't charge the government any fees and won't be permitted to collect commissions from investors to whom they sell the shares, according to people involved in the process.