The UK’s biggest mortgage lender says shareholders will be offered two new shares for every five existing shares priced at 275p.
The bank says it has taken a write-down of £970m against assets held in its trading book in the past year.
Andy Hornby, chief executive at HBOS, says: “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 macro-economic environment deteriorates further.”
Despite these challenging conditions, the group reports what it calls a satisfactory trading performance.
The announcement from HBOS follows the move from Royal Bank of Scotland last week, which also sought to raise cash from its shareholders to the tune of £12bn.