Bradford & Bingley shares slumped last week amid concern that is could be the next bank that needs to be rescued by the authorities.

The government was reported to be considering nationalising B&B to create a “superbank” alongside Northern Rock, as hopes of finding a private buyer faded.

B&B’s 2.5m savers with £22 billion deposited at the bank were reassured their money was safe. The reports came in a week when B&B cut 370 jobs in its mortgage division after applications fell.

Richard Pym, the new chief executive, insisted that the bank was a going concern. “We are a strongly capitalised bank now undertaking a complex transition with regrettable job losses,” he said. “We are planning to put the problems of the past behind us and have a business which is fit for purpose.”

The Financial Services Authority, the City regulator, was understood to be seeking a buyer for the bank after it was downgraded by three ratings agencies and its shares fell 28% to end the week at 20p. If no buyer is found, the government could step in.

Arrears at B&B are almost double the industry average, and 40% of loans will be in negative equity if prices fall 30% from peak to trough, according to Credit Suisse.

We answer your questions.

Should savers be worried?

Analysts said it was highly unlikely that the authorities would let an institution such as Bradford & Bingley, which is the UK’s largest buy-to-let mortgage lender, go under.

The most likely outcome is that the regulator will broker a takeover, as it did with Lloyds TSB’s merger with Halifax Bank of Scotland. If it can’t find any bidders, it could fall back on a nationalisation, as it did with Northern Rock.

If it stepped in to rescue the bank, savers would in fact have more protection than with other banks — savers with Northern Rock benefit from a 100% government guarantee.

Many savers will still be worried about the safety of their deposits, however. If a bank failed, the Financial Services Compensation Scheme would pay out up to £35,000 per person (or £70,000 for a joint account).

If you’re worried, it might be worth moving money above that into alternative accounts.

I’ve only just signed up to B&B savings. Is there anything I can do?

No. B&B has been advertising one-year bonds at 6.7% and you cannot withdraw cash without a penalty before the term-end.

My mortgage is with B&B. What will this mean for me?

About 300 of the staff being made redundant work at the bank’s mortgage-processing department at Borehamwood in Hertfordshire as the bank scales back on new lending. If you already have a mortgage, you will have to continue to make payments.