TSB-owner Banco Sabadell said it is exploring a sale of the business a decade after buying the UK lender.

The Spanish lender “confirms that it has received preliminary non-binding expressions of interest for the acquisition of the entire share capital of TSB Banking Group,” it said in a statement on Monday evening.

It added that it “will assess any potential binding offer it may receive. Naturally, any transaction would be subject to the satisfaction of all legal obligations.”

The move to raise cash is part of the parent firm’s own long-running battle to fend off an €11bn takeover attempt from rival Spanish giant BBVA.

Mortgage lending at TSB came in at £34bn last year, largely unchanged from the previous 12 months, as it struggled with “the impact of lower mortgage margins in a highly competitive market,” according to its 2024 annual report.

The UK bank, which has around five million customers, reported a pre-tax profit of £285m on income of £1.14bn.

TSB could raise between £1.7bn and £2bn for Sabadell, according to a report in the Financial Times.

The paper adds that documents relating to the sale of the UK bank have been circulated to potential bidders in recent weeks.

BBVA’s first bid for Sabadell in May 2024 was rejected by the smaller bank’s board and has seen the lenders at loggerheads for more than a year.

TSB was bought by Sabadell in 2015 for £1.7bn from Lloyds Banking Group.

The move comes as Metro Bank was approached about a private equity takeover that may lead to consolidation in the specialist mortgage sector.

The challenger bank has been approached informally over the last fortnight by investment firm Pollen Street Capital about a buyout, Sky News first reported on Saturday.

Pollen Street and private equity rival BC Partners have a stake in Shawbrook Bank, which in turn owns The Mortgage Lender and Bluestone Mortgages.