NEW YORK (Reuters) – Washington Mutual Inc, the giant US savings and loan beleaguered by mortgage losses, has put itself up for sale, sources familiar with the matter said yesterday.

The Seattle-based thrift has hired Goldman Sachs & Co and Morgan Stanley to run an auction and potential suitors include Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Wells Fargo & Co, one source said.

A sale is neither imminent nor guaranteed and the thrift is exploring other options, a second source said.

Analysts have long expected the credit crisis would force weaker lenders into the arms of stronger rivals. A sale of Washington Mutual, the largest US savings and loan, had been widely expected.

"Everything is for sale in the banking world these days," said Ralph Cole, a portfolio manager at Ferguson, Wellman Capital Management in Portland, Oregon. "Washington Mutual should be shopping itself. You'd have to do due diligence on the balance sheet, but people understand the value of a branch network and deposit funding."

On Monday, Bank of America Corp agreed to pay $50 billion for Merrill Lynch & Co Inc, which has lost $19.2 billion in the last four quarters.

Wachovia Corp, which lost $9.11 billion in the second quarter, approached Morgan Stanley about a merger yesterday, according to published reports.

Washington Mutual overcame a critical hurdle to a merger earlier yesterday when its largest investor, David Bonderman's private equity firm, TPG Inc, agreed to let the thrift raise capital, even if TPG's holdings were diluted.

Washington Mutual shares rose 20 cents to $2.21 in after- hours trading after falling 31 cents to $2.01 during regular trading.