Institutions are thought to have bought up to 20 per cent of the shares available in Bradford & Bingley’s rights issue, which was aimed at raising £400 million.

The 55p-a-share offer, which closed at 11am yesterday, has been hampered by the fall of the bank’s stock, which has been trading below the offer for much of the past few weeks. The vast majority of shareholders, particularly the bank’s million retail shareholders, declined to take part.

However, take-up of its shares is understood to have exceeded that of the recent fundraising by HBOS, which owns Halifax, the building society. Only 8.29 per cent of its shareholders signed up to the rights issue, which closed in July.

It is understood that much of the interest in B&B has come from institutions. Shares in the mortgage bank were trading just over the rights issue price, at 55.25p, as the deadline loomed. They closed at 54.75p, valuing the bank at £791 million.

This will leave UBS and Citigroup, B&B’s underwriters, as well as up to ten sub-underwriters including big institutional shareholders in B&B and other leading UK banks, picking up much of the tab for propping up B&B. The company will announce the results of the issue, which will total £455 million, including £55 million of fees to lawyers and bankers, to the London Stock Exchange on Monday morning.

B&B shares have lost more than three quarters of their value since January and fell to an all-time low of 31p last month. B&B has a large exposure to the buy-to-let market.

The rights issue, initially announced in May, was restructured twice, first in June, when the lender issued a profit warning and had to admit that Steven Crawshaw, its chief executive, was too ill to continue working, and again when TPG, the US private equity house, withdrew its support.

UBS and Citigroup are expected to take up to £100 million of the rights issue, with the remainder being passed on through sub-underwriting agreements to four leading shareholders and six other banks.

It is understood that the large institutional shareholders, Standard Life, Legal & General, Prudential’s M&G and Insight will take on up to £150 million of the total, while the banks HSBC, Lloyds TSB, HBOS, Barclays, Abbey and RBS will take on the remainder.

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