Shares of Northern Rock Plc's plunged after the mortgage lender said it was unable to line up short-term loans from other financial institutions, and received emergency funding from the Bank of England.

The bank plunged 31.46 percent to 438 pence ($8.88) in London as revelations of a cash crunch spooked investors. Friday's dip wiped away nearly a third of the company's valuation.

We are seeing extreme conditions in global liquidity, which have impacted on world markets, Northern Rock CEO, Adam Applegarth, announced on Friday.

Applegarth also said that earnings would fall to between 500 million and 540 million pounds ($1 billion and $1.1 billion) — as much as 147 million pounds ($298 million) less than previously projected.

Northern Rock has been unable to raise funds in light the subprime melt-down in the United States, which slowed down the wholesale money market around the world.

Though substantial funds at a penalty rate were requested by the bank, Northern Rock had billions of pounds in cash at its disposal, Applegarth said.

The support of the Bank of England through this facility reflects a recognition that Northern Rock is solvent, exceeds its regulatory capital requirement and has a good quality loan book, the chief executive stated.

U.S subprime woes have put a number of European banks on to the selling block. Speculation mounts that Northern Rock may follow the same fate as its rival counter parts.

The only positive, if any, is if a white knight/bargain hunter comes in to rescue what is in essence an excellent asset-gatherer. This may offer some modest support against an otherwise terrible day today, said James Hutson, analyst at Keefe, Bruyette & Woods, in a research note.

Italy's largest bank UniCredit bought its smaller Italian rival Capitalia which it bought earlier in the year, while its rival Intesa San Paolo is focused on the Italian market.

A three-bank consortium, including giant, Banco Santander, has been bidding for ABN AMRO.

Applegarth had previously been dismissive of the possibility of a takeover bid.

I worry more about Newcastle United buying a decent central defender than I do about getting taken over, he reportedly said in January.