Britain's Co-operative Bank said its ongoing sales process has drawn interest from multiple bidders after the ailing British lender put itself up for sale in February.
Sources close to the process told Reuters that most bidders are interested in specific assets only as they see little value in buying the whole group.
Others like Spain's Banco Sabadell have ruled out making a move for Co-op.
The lender, which has four million customers, urgently needs to raise capital to avoid the risk of being wound down. It has not made a profit since 2011 and needs to repay £400m worth of bonds that mature in September.
On February 13 it announced plans to find a new owner after it struggled to meet regulatory capital requirements.
Its advisers Bank of America and UBS have asked interested parties to submit non-binding offers ahead of a deadline of April 3, one of the sources said.
The bidding field includes rival lender Virgin Money as well as private equity-backed OneSavings Bank OSBO.L, which is held by JC Flowers, the sources said.
A plethora of investment firms have set their sights on Co-op's bad debt and are hoping for a break-up of the Manchester-based lender into a good and bad bank.
These investors, often dubbed "vulture funds", include Cerberus, Fortress and Apollo among others, the sources said.
Co-Op Bank, rescued from the brink of collapse by a group of hedge funds in 2013, said it would provide additional information to selected parties to proceed with their offers.
But sources said there is lukewarm interest in buying the whole bank and bidders are fairly confident that the ailing lender will be chopped up and sold in pieces.
"The upcoming round of bids is irrelevant because no one will come close to matching price expectations," one of the sources said. "A break-up of the bank is inevitable."
The bank, which is being closely watched by UK regulators, said it would continue to negotiate an equity raising plan from existing and new capital providers as an alternative to the sale process.
It expects to make a "significant loss" for last year despite making progress in implementing a turnaround plan and cutting its cost base by a fifth since 2014.
