HBOS has announced plans to raise £4bn of extra funding from existing shareholders through a rights issue.
It is the second UK High Street bank to announce such a move in response to the impact of the global credit crunch.
HBOS has about two million shareholders and is the most widely-held UK share.
This is what the move will mean for shareholders.
What is a rights issue?
Companies issue extra shares to raise money. They are offered to existing shareholders, usually at a discount to the current share price.
Shares are generally offered in proportion to existing holdings, so if you own 10% of the old shares, you are offered 10% of the new ones.
The financial effect will be felt on dividends, as profits will be more thinly-spread because more shares will exist. However, the company could find itself in a stronger position.
What is HBOS offering?
Existing shareholders will be offered two ordinary shares for every five existing shares they hold for 275 pence per share.
HBOS said it was offering the shares at a price that was 45% less than the closing price of 495.75p on 28 April - the day before the announcement was made.
Is the bank in trouble?
No, this is not another case like Northern Rock.
HBOS has enough money to finance its day-to-day activities but wants a fatter financial cushion to deal with the effects of the credit crunch.
It says the extra funding would allow it to grow internationally and invest in its residential mortgage and savings business.
The global credit crunch has affected the value of banks' investments and threatened the profitability of their businesses.
So HBOS is not alone then?
No. The previous week, the Royal Bank of Scotland (RBS) announced it was planning a £12bn rights issue - one of the largest seen in UK corporate history.
RBS said it had seen a "severe and increasing deterioration in credit market conditions, the worsening economic outlook and the increased likelihood that credit markets would remain difficult for some time".
NatWest, Ulster Bank and insurer Direct Line are all owned by RBS, but none of its customers will be affected.
The same is true of HBOS customers, whose financial dealings with the bank will be completely unaffected.
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