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Britain’s biggest mortgage lender begged for new funding on Tuesday and Germany’s top bank suffered its first quarterly loss in years as the credit crunch sapped financial industry strength.

UK-based HBOS asked shareholders for 4 billion pounds ($7.9 billion) via a rights issue and said it would cut its dividend payout as it grapples with toxic assets and a deteriorating home loans market.

Deutsche Bank wrote down 2.7 billion euros ($4.2 billion) as its contribution to the burgeoning pile of global property-based asset mark-downs, and abandoned its 2008 profits target. Europe’s biggest insurer Allianz also wrote down 900 million euros.

HBOS, which owns Britain’s mortgage market leader, The Halifax, is the second major UK bank in days to turn to investors. Royal Bank of Scotland announced plans last week for a record 12 billion pound cash call $1500 payday loan. Analysts say the HBOS move could pressure others to follow suit.

Most worryingly for investors, the Deutsche results, the German bank’s worst since the collapse of the dotcom bubble, showed signs of broader problems.

Revenue at Deutsche’s investment bank arm slumped to 880 million euros in the first quarter from 6.1 billion a year ago.

“The issue is not the writedowns,” said Dieter Ewald, a fund manager with Frankfurt Trust. “What is worrying for me is the impact on the operating business — that’s decisive.”

HBOS too said in its trading statement that UK market conditions remained challenging and that it expected a deterioration of the credit environment in 2008. 

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