London-listed financial stocks sank on Friday morning, wiping billions from the FTSE 100, as renewed fears over the health of US regional lenders rattled global markets.
Barclays PLC (LSE:BARC) was the hardest hit, falling 5%, while Standard Chartered PLC (LSE:STAN) and NatWest Group PLC (LSE:NWG) also came under pressure.
Wealth managers, including St James's Place PLC (LSE:STJ) and Schroders PLC (LSE:SDR), were dragged lower in the broader sell-off.
The slide followed sharp declines on Wall Street, where shares in US regional banks slumped after two lenders disclosed significant loan losses.
Zions Bancorp plunged 13% after writing off $50 million linked to a California loan, while Western Alliance fell 11% amid exposure to the same borrowers.
The news reignited concerns about credit quality across the banking sector, only days after subprime auto lender Tricolor Holdings collapsed, prompting JPMorgan to book a $170 million charge.
Investors sought safety in government bonds and gold, with the latter heading for a seventh consecutive weekly gain.
The flight to quality drove US Treasury yields lower, with the 10-year dipping below 4%.
The turmoil weighed on sentiment across Asia and Europe, where financial shares led losses. Markets were already on edge over escalating US-China trade tensions and the ongoing US government shutdown, which has delayed key economic data.