Royal Bank of Scotland and Lloyds were among the biggest fallers in London amid fresh uncertainty over government plans for the banking sector.
Nick Clegg, deputy leader of the coalition, voiced support for a break-up of banks, despite earlier signals from the chairman of the Independent Banking Commission that he was against such a radical plan.
With banks likely to face some kind of legal separation between retail and investment banking, the sector came under pressure and offset a resilient session for the FTSE 100 Index, which stood 8.8 points higher at 5905.9.
RBS fell 3% or 1.4p to 43.5p, while Lloyds was off 1.2p at 66.2p and Barclays dropped 2.8p to 298p.
The other main interest of the session came from the debut of International Consolidated Airlines Group following the merger of British Airways and Iberia.
Shares were 288.5p, a rise of more than 2% from the pair’s joint valuation on Thursday, when BA called time on nearly 24 years of trading under its own name.
Elsewhere, Northern Foods shares jumped 16% or 10.25p to 73.25p after it agreed a £342 million takeover by the owner of Harry Ramsden’s restaurants.
The deal on Friday night trumped a previously-agreed merger with Ireland’s Greencore, which is now said to be considering whether to sweeten its offer for Northern.