Analysts are looking at the prospects for the whole UK banking industry
Bradford & Bingley (B&B) shares fell to a record low as worries about its fund-raising plans intensified.
Shares dropped as much as 18% to a new low of 33p, well below its rights issue price of 55p, then recovered slightly.
B&B suffered a big sell-off on Friday when credit agency Moody's downgraded its debt, prompting Texas Pacific Group (TPG) to pull out of plans to invest.
The shares were hit further by news that a possible buyer of B&B was unlikely to rekindle its interest.
Investment company Resolution had been interested in taking control of B&B, but walked away after the firm was refused access to the lender's books.
On Monday, B&B shares closed 16% lower at 42p.
Analysts said that B&B has been hit by a number of negative factors all at the same time.
Analysts at Fox-Pitt, Kelton called recent developments "unequivocal negatives".
B&B's recent problems were sparked on Friday by TPG's decision to back out of a plan to pay £179m for a 23% stake in the lender.
The mortgage firm managed to salvage its plans to raise £400m after leading City institutions rallied round to provide the cash.
B&B is offering investors its new stock at a price of 55p per share.
A rights issue is when a company offers shares at a discount to existing investors, giving them the opportunity to increase their holdings and raise money for the company to use to shore up its balance sheet.
Fox-Pitt, Kelton cut its target price for B&B shares to 43p on Monday on the assumption the rights issue was completed at the 55p subscription price and the Bank of England and Financial Services Authority ensured B&B did not "fail".
"However, we cannot rule out the possibility of an effective failure, with shareholders receiving little or nothing for their shares," said analysts Fox, Pitt-Kelton.
B&B will hold an extraordinary meeting on 17 July to gain approval for its revised fundraising plans.