The Bank of England has placed the Co-op Bank under “intensive supervision” as survival options for the ethically-based lender dwindle.
The BBC understands contingency plans to ensure the “orderly failure” of the 150 year old bank are well advanced.
Co-op Bank customers will be protected whatever happens, but professional investors took a beating on Wednesday.
The bank has been looking for buyers since February and said it was “pleased” with the interest shown.
Its statement added that the sales process was “well-ordered” and it was “engaging with potential bidders as planned”.
Co-op customers have very little to fear as current accounts, personal loans and mortgages would be taken on by another bank if necessary and deposits up to £85,000 are guaranteed by the Financial Services Compensation Scheme.
Customers of the ethically focused Co-op bank have been very loyal during a period which has seen big losses, branch closures and a drug scandal involving its former non-executive chairman, Paul Flowers dent the financial and ethical integrity of Co-op bank.
It may yet live to fight on, but the Bank of England is braced for its failure.