Bank bosses grilled over cash call

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Halifax Bank of Scotland said the extra capital was needed to "consolidate its competitive position".

HBOS also wrote off £2.8 billion on investments hit by the credit crunch.

The move follows Royal Bank of Scotland's £12 billion cash call last week.

More than two million of HBOS's smaller shareholders face paying out to maintain their stake in the bank in the rights issue.

Those expecting to see chief executive Andy Hornby at the bank's annual general meeting at Glasgow's Scottish Exhibition and Conference Centre were angry when he appeared by video link instead, with one man walking out in protest.

Mr Hornby told shareholders that the bank's "prudent" strategy would serve them well over the next few years.

He 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."

The firm, which supplies one in five new mortgages, is taking a cautious approach to unsecured lending and expects a "modest" increase in bad debt charges at its retail business.

The bank posted underlying pre-tax profits of £5.71 billion for 2007 but its shares have suffered during a turbulent beginning to 2008.