The government will own 43 per cent of the combined HBOS/Lloyds TSB after a dearth of interest from institutional shareholders in the two banks’ capital raising left the Treasury to take up 99 per cent of the unsubscribed new shares.

HBOS, which will delist from the stock exchange on Wednesday following the merger, had sought to raise £11.5bn and Lloyds TSB £5.5bn as part of the government bail-out scheme to recapitalise British banks.