Royal Bank of Scotland shares have plunged 67% after the bank said it was heading for a record loss.
The bank said it expects to report a deficit before write-downs of between £7bn and £8bn for 2008.
It will also write down assets, largely related to its takeover of ABN Amro in 2007, of up to £20bn.
RBS's final deficit is set to beat Vodafone's 2006 loss of £15bn, the current UK record. The bank also said jobs would go because of the downturn.
The firm's shares ended Monday trading down 23.1 pence to 11.6p.
As part of the government's package to rescue British banks announced on Monday, the Treasury said it would swap £5bn of preference shares for ordinary shares in the bank, taking its stake in RBS to nearly 70%.
RECENT FINANCIAL RESULTS
Fourth-quarter 2008 results
Citigroup: $8.3bn (£5.7bn) loss
Bank of America: $1.7bn loss
Deutsche Bank: Estimated $6.4bn loss (4.8bn euros; £4.4bn)
JP Morgan Chase: $702m profit
Source: Company statements
"Credit and market conditions in the fourth quarter of 2008 were particularly challenging," RBS said in a trading update.
RBS led a consortium, which also included Dutch bank Fortis and Spain's Santander, that bought ABN Amro in 2007.
BBC business editor Robert Peston said that the acquisition "must now rank as one of the worst and most ill-timed takeovers in history".
But he also added: "No one should fear, however, that this is a bust bank."
The agreement to swap preference shares for new ordinary shares will stop RBS having to pay the 12% fixed dividend that preference shares attract - worth £600m per year - and could allow it to increase lending.
Ordinary shares: Give you voting rights at general meetings, and pay a variable dividend depending on profits
Preference shares: Give you no voting rights, but pay a fixed dividend irrespective of profits
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