HBOS, the merged Halifax and Bank of Scotland group, is raising up to £1.37 billion sterling through a share placing.
It wants the cash to expand because it believes the UK economy will grow strongly, leading to a greater demand for mortgage, insurance and investment products.
It's prepared to offer as much as 4.8 per cent of its equity base to investors.
The group has also issued its full year results two days ahead of schedule.
These show it made pretax profit before exceptional items of £3.007 billion in 2001, up 3 per cent year-on-year. It is paying a 28p a share total dividend, up 25%.
The synergies from its recently completed merger will now be £690 million, up £70 million on first estimates.
Retail banking profits fell to £1.403 billion from £1.567 billion, though the bank says it's up against stiff comparisons. It points out it trimmed profit margins on its mortgages to remain competitive and has also invested in Intelligent Finance, the group's online operation.
Cross-selling helped the insurance and investment business lift profit to £772 million from 593 million. Intelligent Finance in its first full year contributed £5 billion to the group's net mortgage lending - 9 per cent market share - and increased savings balances to £1.7 billion.
PA