Shares in Royal Bank of Scotland fell by almost 12% after the bank reported further losses and said it expects poor earnings for the next couple of years.
The bank lost £1 billion ($US1.7 billion) in the first six months of the year, due to bad debts rising to nearly $US13 billion.
Chief executive Stephen Hester also said buoyant investment banking conditions, which helped first-half earnings, were likely to ease in the coming months. He said a recovery was still some time off.
Last week, Lloyds Bank, in which the British government has a 43% stake, said the worst was over for its bad loans and hinted that a recovery could be around the corner.
But Mr Hester said on Friday it was still too soon to say whether the market had seen the high-tide mark for bad debts.
RBS shares were trading at 47.13 pence at 1437 GMT on Friday, down 11.8%. The average price paid by the government for RBS shares was 50.5p.