Enron debt fears hit FTSE

Banking stocks have got off to a bad start due to fears over their involvement with collapsed US energy giant Enron .

Speculation has been mounting that British banks could face losing billions of pounds due to the crisis at the US group, which has filed for bankruptcy protection.

The FTSE-100 Index was down 45.9 points at 5157.7 after an hour's trading on the London Stock Exchange.

Abbey National has already confirmed it expects to lose up to £95m following the failure of Enron.

The National Australia Bank - owner of Yorkshire Bank and Clydesdale Bank in the UK - has said it has exposure totalling around £141m.

Barclays was also suspected of being vulnerable, but the bank has said it will not see any material impact from the collapse.

Investors seemed unwilling to take heart from the trading statement, and shares in Barclays were down 2% or 38p at £21.12.

Meanwhile, Abbey National slipped 1½p to 976½p; Lloyds TSB was off 6½p at 715½p; HBoS was 12p weaker at 813p; and Royal Bank of Scotland fell 35p to £15.90.

Shares in advertising group Cordiant Communications fell by 20% or 18½p to 75p after it said tough market conditions were forcing it to cut more jobs, merge operations and halt other lossmaking activities.

And beer, pubs and hotels group Fuller Smith Turner fell by 4% or 17½p at 430p after unveiling a half-year loss and warning of tough times ahead.