The board of the Co-operative Bank has hoisted a for sale sign over the troubled lender as concerns mount over its capital position.

The bank, which has four million customers, said that its ability to meet longer term UK bank regulatory capital requirements has been hampered by low interest rates and higher than anticipated transformation and "conduct remediation" costs.

As a result, and following an annual planning review, it is "inviting offers", the bank said.

"The board is commencing a sale process, something always considered a potential outcome of the turnaround plan, alongside considering other options to build capital and meet the longer term capital requirements applicable to all UK banks," the bank said in a statement.

Last week the Co-operative Group, which owns 20% of the bank, embarked on a top-level shake-up that will see Richard Pennycook step down as group chief executive.

The move, which will see food boss Steve Murrells take the helm, was accompanied by comments from chairman Allan Leighton that the Group could pump more money into the lender.

But the bank's chief executive Liam Coleman said: "While our plan has been impacted by lower for longer interest rates, the costs associated with the sheer scale of the transformation and the legacy issues we faced in 2013, there is considerable potential to build the bank's retail franchise further using the strength of the brand, its reputation for strong customer service and distinctive ethical position."

The bank said it is also considering options other than a sale to build capital, including raising cash from new and existing investors.

Co-op Bank almost collapsed in 2013 and was forced into a painful debt for equity swap.

The loss making lender is now majority controlled by hedge funds.

A spokesman for the Bank of England's Prudential Regulation Authority said: "The PRA welcomes the actions announced today by the Co-operative Bank.

"We will continue to assess the bank's progress in building greater financial resilience over the coming months."

The bank confirmed it will post a "significant" loss for the year to December 31 after warning in January its common equity tier one capital ratio - an industry measure of financial strength - will fall and remain below 10% in the medium term.

Chairman Dennis Holt said: "The bank has met its Pillar 1 regulatory capital requirements continuously since 2014 and expects to continue to do so.

"At the same time, since we began work on the bank's turnaround, the board has always been clear that we would need to build capital for the future.

"We are now commencing a sale process, alongside other options.

"The Bank's ethical heritage and customer proposition will be a central consideration in this."