Shares in Bradford & Bingley fell further yesterday after a decision by the embattled mortgage lender to cut 370 jobs and take further writedowns of credit assets triggered speculation of a possible sale.

B&B, which has been downgraded to one notch above junk status by credit ratings agency Moody’s, said it was cutting jobs due to the downturn in the mortgage market. It added it would take a £133.8m hit to pre-tax profits after its decision to sell or to write down exotic credit assets.

Its shares fell 25 per cent to a record low of 21.25p on fears an acquisition could hit equity holders hard.

James Hamilton, analyst at Numis, said: 'This is still a highly leveraged bank and there is a real possibility that shareholders could get wiped out.'

Analysts asked whether B&B could remain independent even though the bank has said it is well funded and capitalised.

They estimate B&B will have a core equity Tier 1 ratio – a measure of financial strength – of 8.4%after the writedowns.

Jonathan Pierce, analyst at Credit Suisse, said: 'The situation is increasingly untenable in our view.'

Financial Times, The Times