Lloyds Banking Group is to raise up to £22.5bn ($37bn) of fresh capital, 7 per cent more than under last week’s plan for £21bn, in response to bondholders’ demands for a larger allocation of the bank’s ground-breaking contingent convertible instruments.

Demand from bondholders was so strong, said the bank, that it would raise up to £9bn rather than £7.5bn, through the so-called CoCos, alongside the £13.5bn rights issue.