Pretty much the only friends that banks have left are perennially bullish private equity investors and inexperienced sovereign wealth funds. Now it appears that even private equity is turning its back. Late on Thursday, TPG Capital pulled out of a £179m investment in Bradford & Bingley. When first announced in early June as part of a £400m capital raising, TPG’s support of the UK bank was hailed as a vote of confidence in the sector. What does it say now that private equity is walking away?

It is clearly not a positive signal – B&B’s shares fell 18 per cent yesterday. The official story is that TPG had the right to terminate the deal following a downgrade by Moody’s of the bank’s debt ratings. It may well be that simple. Being just three notches above junk status makes securing funding for B&B far less certain. If TPG thought for a moment that funding might not be available in the medium term, it had no choice but to bale.