Lloyds Banking Group has got the overwhelming backing of shareholders for its £13.5bn rights issue.

The company said 99.75% of shareholders backed the proposal in a vote at a general meeting in Birmingham.

Lloyds is issuing the new shares as part of plans to raise £22.5bn to improve its finances, and avoid joining the government’s debt insurance scheme.

The company is 43% owned by the government, which has already said it will participate in the share issue.

‘Shape future’

A rights issue is when a company issues new shares and sells them to existing shareholders at a discount to the listed share price.

Lloyds is selling the new shares at 37 pence each, a discount of 59.5% to the bank’s closing share price on Monday.

A total of 36.5 billion new shares will be issued – that amounts to 1.34 new shares for every one already in existence.

"Crucially, with your approval and capital markets support, [this opportunity] will allow us to shape our own future," Lloyds chairman Win Bischoff told shareholders at the meeting.

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