There was more pain in the banking sector today as part of a wider market slide that saw the FTSE 100 index fall to its lowest level since November 2005.
The FTSE fell to 5379.6, down 133.1 and more than 20% below its peak of 6732.4 last June, pushing the index into official bear market territory.
Bradford & Bingley has fallen to a fresh low this morning, further below the 55p level at which it is seeking to raise funds through a rights issue.
The stock was down 23% to a record low of 32.25p, as investors continued to fear for the buy-to-let lender's future. This follows a 16% plunge yeterday.
Concerns around Bradford & Bingley brought down Alliance & Leicester, which was down 9% at 225.5p.
Analysts at Panmure said they now expected the firm - which unlike many of its rivals has announced no plans to raise fresh funds - to report losses in 2008 and 2009, and cut their price target from 450p to 180p.
Others in the sector to suffer included Bank of Ireland, down 11% to 4.45 euros, after a trading update in which the company warned that some customers were struggling to repay loans.
Royal Bank of Scotland was down 5% to 191p, putting it among the FTSE 100's five biggest fallers.
The woes in the banking sector came against a backdrop of global unease, with US banking stocks falling to their lowest level for a decade yesterday and European banks such as Credit Suisse and Credit Agricole falling todaay.
The FTSE 100's biggest faller was the London Stock Exchange, down 9% to 657p on fears of competition from new trading platforms.
Building materials group Wolseley fell 6% to 292.25p, as Panmure cut its price target fom 400p to 280p.
Retail group Kingfisher was another heavy faller, down 5% to 93p.
Ailing broadcaster ITV fell through the 40p mark to put it among the FTSE 100's top ten fallers. The stock has been declining for months and recorded a previous closing low of 40p last Wednesday. Today it stood at 39.7p, down 5% on last night's close of 41.6p.
Also in the media sector, Trinity Mirror continued to suffer, down another 9% to 76.75p, following a week of price falls since the newspaper publisher put out profit warning last Monday.
