Co-operative Bank PLC's U.S. hedge fund investors have mandated Goldman Sachs Group to launch discussions with interested parties regarding a potential sale of the British lender, Sky News reported, citing sources.

The sources noted that the investors, Goldman and Co-op Bank CEO Andrew Bester have sounded out several high-profile retail banks, such as Barclays PLC, Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC, in recent weeks over a possible deal. A formal sale process is expected to begin during the course of 2020, according to the report.

In 2017, a syndicate of hedge funds — including Silver Point Capital LP, GoldenTree Asset Management LP, Cyrus Capital Partners LP and BlueMountain Capital Management LLC — agreed a £700 million deal to rescue Co-op Bank from the brink of collapse.

While the funds are pushing for a quick sale of Co-op Bank, the lender's board prefers a more patient approach since its five-year turnaround plan is still in progress. A source close to the bank told Sky News that investor confidence in the lender was increasing, with Moody's upgrading the bank's ratings in June.

Co-op Bank's board is also expected to hire a separate adviser to Goldman before a formal auction is launched, according to the report.

In November, the bank reported a third-quarter pretax loss of £118.6 million, up from £87.0 million a year ago.