Embattled mortgage bank Bradford & Bingley (B&B) announced plans to sack 370 people today as its future as an independent business was thrown into fresh doubt.

Shares in the bank, which is grappling with a flood of buy-to-let mortgages turning sour, slumped to a new all-time low today as it also revealed it was selling off more toxic assets for a bottom-line loss of £134 million.

B&B's mortgage processing centre in Borehamwood, Hertfordshire, is to be closed with the 300 staff made redundant. A further 50 mortgage advisers in the branches are to be sacked, alongside some other sales staff.

B&B has been left reeling in the past few days by downgrades of its credit rating, leaving its standing in the money markets just one notch above "junk" status - a near impossible situation for a deposit-taking institution.

The bank said the job losses would shave £15 million a year from its costs. It is boosting staffing levels in arrears collection - the business of chasing repayments from customers behind on their mortgage payments.

B&B has been hit by rocketing numbers of customers defaulting on their mortgages or falling behind on interest payments. It specialises in lending to buy-to-let landlords and to higher-risk "self-certified" borrowers, people who have not had to provide proof on income to qualify for loans.

Richard Pym, the new chief executive parachuted in last month to try to save the bank, said, "The changes we have announced today focus the business as a strong savings bank, reduce the size of our lending activities and increase our capacity in arrears collection."

B&B shares slumped 8 per cent to 23p, far below the 55p a share price at which the bank raised emergency capital in the summer. B&B said it remained strongly capitalised.

The bank also warned staff that it planned to cut the size of the head office workforce in Yorkshire at a later date. The Borehamwood processing centre will close in the first quarter of 2009.

The Financial Services Authority has become increasingly concerned about B&B and its heavy dependence on the paralysed wholesale markets for much of its funding. It has reportedly been trying to line up a deep-pocketed buyer to rescue the group. Banco Santander of Spain, which owns Abbey and Alliance & Leicester, and ING, the Dutch savings bank, are seen as possible buyers.

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