The creation of the UK's biggest bank looks set to go ahead.
Lloyds TSB and Halifax Bank of Scotland (HBOS) have announced plans to raise a total of £17 billion in funding to allow their proposed merger to go ahead. Both banks have insisted they remain committed to the deal, despite reports that other companies could launch rival bids.
The banks - which have both announced new write downs as a result of the ongoing financial market turmoil - aim to raise £13 billion through new share issues and a further £4 billion from the government.
The takeover of HBOS by Lloyds TSB would create the UK's biggest bank, with more mortgages and accounts than any other high street institution. Lloyds has claimed the deal will help it save £1.5 billion by the end of 2011.
It has been revealed that the newly merged company will be called Lloyds Banking Group. Lloyds chief executive Eric Daniels will keep his role at the bank.
Following the takeover, the government will own a 43.5 percent stake in the enlarged bank, while former Lloyds shareholders will have a 36.5 percent share and HBOS shareholders will own 20 percent.
Lloyds Bank Group merged with TSB Group in September 1996, while HBOS was formed from the merger Halifax and the Bank of Scotland in 2001.
