Royal Bank of Scotland said UK buy-to-let mortgages are only one per cent of the bank's loan portfolio in a bid to reassure investors.
In a statement to the stock exchange, RBS also confirmed the trading guidance issued in its April interim statement "remains appropriate" for the group.
RBS said it posted the statement in response to enquiries received.
The bank's share price fell 3.06 per cent in morning trading on the London Stock Exchange after rival Bradford & Bingley issued a profit warning.
B&B is Britain's biggest buy-to-let lender and yesterday shocked the market by confirming its chief executive, Steven Crawshaw, was stepping down.
Today the bank confirmed investors fears when it warned profits will be below expectations this year on slowing property market, sending its shares - and those of other lenders – plunging.
It was also announced that a US investor has bolstered the bank by buying a 23 per cent stake in B&B. The deal with Texas firm TPG will also see a restructuring of the bank's controversial right issue.
The news has undermined confidence further in the banking sector, sparking a fall in banks' shares on the FTSE 100.
Alliance & Leicester dropped 6.88 per cent to 396p and HBOS fell six per cent to 376p.
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