The turmoil in global banking intensified on Friday as Citigroup and Merrill Lynch reported huge losses, and shares in Britain's Barclays plummeted amid fears it might need more capital.

After the close, Barclays, whose shares fell 25 per cent to 98p - their lowest level since 1993 - said it knew of no reason for the plunge. The bank, which had a market value of £8.2bn ($12.1bn) at on Friday's close, added that its full-year results, due out next month, would beat the analysts' consensus of £5.3bn in pre-tax profits.

Nevertheless, the grim news from some of the biggest names in global finance stoked investor fears of another round of capital-raisings, triggering another sell-off in bank shares.

The disclosure that Merrill Lynch - owned by Bank of America - had suffered a $21.5bn operating loss as the value of mortgage-backed assets plunged in the past three months of 2008 came as BofA secured a $138bn bail-out from the US government.

The US bank, which finalised an $18.8bn all-share takeover of Merrill two weeks ago, received a $20bn capital infusion and a backstop on $118bn of troubled assets. BofA told the government in December that it would not be able to close the deal without help.

Shares in BofA, which reported a $2.4bn loss in a quarter marred by Merrill's disastrous performance, fell nearly 14 per cent.

Citigroup underlined the depth of banks' problems by reporting an $8.3bn net loss, its fifth consecutive quarter in the red.

The troubled financial group suffered nearly $28bn in writedowns and loan loss provisions in the quarter as the price of mortgage securities plummeted.

Citi's loss for the year was more than $18bn. The company confirmed its plan to isolate some $800bn-worth of unwanted assets and businesses into a non-core unit called Citi Holdings.

Citi's key businesses of commercial, investment and retailbanking will be housed in a unit called Citicorp, a sign of the company's desire to unravel the 1998 merger between Citicorp and Travelers that created Citigroup.
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