Bank pair raise £8bn - but may need more

City analysts also speculate that Lloyds TSB, which has so far resisted joining the search for new funds, may be forced to reconsider if the housing market continues to slump.

UBS predicts that Lloyds will have to slash its dividend by a third next year if it does avoid a rights issue, given the fresh pressure the ongoing financial turmoil will place on its balance sheet.

Lloyds has won plaudits for prudently avoiding the worst of the downturn, but now rivals have succeeded in raising money - albeit in fraught circumstances - it is left in a comparatively weaker position.

HBOS shares today dipped 4¾p to 263½p, moving further below the rights issue price of 275p. That means underwriters Morgan Stanley and Dresdner Kleinwort are left holding a large chunk of the shares.

With the share price underwater, there was little incentive for investors to take up the rights when they could get the shares more cheaply in the market.

There will be strong downward pressure on the share price for some time because other investors are aware that the two investment banks will be looking for any chance to sell their holding.

Barclays today said investors took up just 19% of new shares in its recent fundraising, meaning the bulk of the money will be provided by overseas funds.

Britain's third-biggest bank raised £4.5 billion from investors in Qatar, Japan, China and Singapore, and then gave existing shareholders a chance to buy new stock on the same terms of 282p a share.

That only a small percentage took up the offer was no surprise. In all, 267 million fresh shares were bought by current investors, with 1.14 billion in new shares taken by the overseas funds.

The Qatar Investment Authority now owns 8% of the company, with China Development Bank taking 3%, Sumitomo Banking Corp 2% and Singapore's Temasek between 2% and 3%.

Barclays chief executive John Varley said: "I'm pleased to welcome new shareholders to our register as a result of our capital-raising. We look forward to building on our relationships with our new shareholders."

Barclays shares slipped back 5¾p to 284¾p.

Although there has been a rally in bank shares in the past few days, another writedown from Merrill Lynch yesterday soured sentiment. The Wall Street giant wrote off another $9.4 billion (£4.7 billion), taking its losses in the last year to $19 billion.

Analysts are concerned that UK banks might have to follow suit.

Sandy Chen at Panmure Gordon said: "The big question is, are there going to be more writedowns?"

Bradford & Bingley this week won approval from shareholders for a £400 million fundraiser.