The planned sale of the Co-op bank would be “bad for competition and choice”, two treasury committee MPs have claimed.

Co-op bank, which has more than four million customers, announced its intent to sell earlier this week.

Its board said its “ethical standpoint” made it “a strong franchise with significant potential” to interested parties.

But speaking to the BBC, the former business secretary Sir Vince Cable, George Kerevan MP, and Helen Goodman MP warned that any sale of the Co-op bank would impact on choice and competition.

“Whatever we think about the Co-op Bank and how it got in to trouble, it’s bad news when we have only a very, very small number of banks catering to domestic and business customers,” Sir Vince said.

“Britain is in a very unusual position of having a very high concentration of banks, quite unlike most continental countries such as Germany, quite unlike the United States, where there are lots of big and small banks catering to different needs.

“We have a concentrated system, and it’s one that has historically provided a very bad service.”

Mr Kerevan further warned that a sale may mean even less competition with banks on the high street.

“Britain has probably the most monopolised, concentrated banking system in the world. It means there’s no competition, which means that charges to the consumer are higher than they need to be,” he said.

In a statement, the bank said its sale will have no direct impact on the products customers have with it.