Manchester-based Co-operative Bank on Monday confirmed that it is in “advanced discussions with a group of existing investors with a view to a prospective equity capital raise and liability management exercise.”

The troubled bank announced on February 13 that it was commencing a formal sale process under the UK’s Takeover Code alongside considering other options to build capital to meet the longer term capital requirements applicable to all UK banks.

On Monday the Co-operative Bank said: “The Bank notes recent media speculation and confirms that it is in advanced discussions with a group of existing investors with a view to a prospective equity capital raise and liability management exercise.

“The Bank and other relevant parties continue active discussions regarding separation of the Co-operative Pension Scheme (Pace).

“The Formal Sale Process continues.

“The Bank continues to fully discuss both the sale process and the capital raise options with the Prudential Regulation Authority (PRA), which has welcomed the sale and capital raise process.

“A further update will be made when appropriate.”