Its shares plummeted 66.75p to 94p on the back of uncertainty over possible government help, funding fears and further worries that Lloyds might be ­seeking to renegotiate the terms of its all-share offer. HBOS shares are worth half the value of the Lloyds bid.

The fall came as it emerged it was close to selling its Australian arm for £800million.

The probable buyer is Commonwealth Bank of Australia, which will pick up BankWest, the country’s biggest mortgage lender, and St Andrew’s.

However, the sale will help the stricken British bank boost capital reserves, even though the figure is less than a third of what the business might have fetched  in better times.

Collins Stewart analyst Alex Potter said: “The price is significantly less than the £3billion we had initially hoped for.
“But we would still take the sale positively.”

EXPRESS CITY: IN-DEPTH ANALYSIS OF THE FINANCIAL CRISIS