The UK's biggest mortgage lender, Halifax Bank of Scotland, today called on shareholders for £4 billion to strengthen its balance sheet.
HBOS said the rights issue - which follows Royal Bank of Scotland's £12 billion cash call last week - was needed to "consolidate its competitive position".
The bank also wrote off £2.8 billion on investments hit by the credit crunch.
More than two million of the bank's smaller shareholders face paying out to maintain their stake in the bank in the rights issue.
Under the terms of the deal, they will be offered two new shares at 275p for every five held.
Chief executive Andy Hornby said the move would help boost the bank's core tier one ratio - a key measure of how well-capitalised a bank is - to between 6% and 7%. Investors will also receive an interim dividend in shares as HBOS looks to conserve its cash.
Mr Hornby said: "We are planning for a more challenging environment ahead and the proceeds of the rights issue should ensure that we benefit from strong ratios even if the macroeconomic environment deteriorates further.
"In the long term we remain optimistic about the fundamental prospects for our core businesses."
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