Investors have declined to buy extra shares in HBOS following a new rights issue from the bank.
Just 8.29 per cent of HBOS investors chose to buy discounted shares in the bank following a £4 billion rights issue designed to strengthen the organisation's financial position.
Investment banks Morgan Stanley and Dresden had underwritten the rights issue and will now be responsible for selling the shares within the next two days or adding them to their own stock.
Shareholders failed to take advantage of the rights issue, which saw two shares offered at 275p for every five held. However the deal was unattractive to investors after HBOS shares slipped to less than the discounted price last week.
The discounted share issue price was set last April when shares in the company were valued at 500p, however the current economic slowdown and a number of write-downs in the sector has had a knock-on effect for HBOS.
A spokesperson told the BBC: "The rights issue was conducted in the middle of a fierce financial storm, we saw unprecedented volatility in bank stocks."
The unexpectedly low share take-up makes the fundraising attempt one of the worst in recent times.
