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Alliance & Leicester was among the losers, falling 8.2 per cent to 228.3p. Broker Panmure Gordon said: "We now expect that A&L will report losses in 2008 and 2009. We also think that capital ratios will weaken considerably."
Meanwhile, Bradford & Bingley shares continued their descent, losing 26.2 per cent to 31p. In the previous session, the bank lost 16 per cent, reports the Financial Times.
Lloyds TSB shares fell by 2.9 per cent to 287p, while the Royal Bank of Scotland lost 3.9 per cent, falling to 193.2p.
Wall Street is also reportedly on the brink of bear market territory after analysts warned that Fannie Mae and Freddie Mac, the government-sponsored mortgage providers, might have to raise extra capital by introducing an accounting charge.
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