Britain's state-controlled Lloyds Banking Group on Monday reported an 87-percent take-up for heavily discounted new shares recently issued to raise 4.0 billion pounds (4.6 billion euros, 6.3 billion dollars).
"Lloyds Banking Group plc announces that valid acceptances have been received ... representing approximately 87 percent," LBG said in a short statement.
LBG had launched the rights-issue last month to help to repay its bailout by the British government, which owns about 43 percent of LBG.
Under the terms of the new stock offer, should no investors come forward for the remaining 13 percent of shares the British government will add to its stake.
Treasury minister Paul Myners said the strong take-up by investors showed "very real progress."
He added in an interview with BBC radio: "To imagine, three months ago, that we could have raised primary equity for a major UK bank experiencing the sort of bad debts that Lloyds was announcing is extremely difficult.
"I think we have now moved into a new territory in which institutional investors are saying 'We now have confidence in UK banks, their capital is strong and they are clearly again lending and supporting the UK economy.' So it's good news.
"I think there is still a great deal to be done. The world economy is still in a very nervous condition, but there are some signs in areas traditionally regarded as leading indicators that the underlying economy is moving to a position where improvement can be envisaged," added Myners.
LBG has shed about 3,000 jobs since its creation in January, when Lloyds TSB bought rival lender HBOS. The latter had faced collapse because it was struggling to raise funds owing to the credit crunch.
Lloyds TSB management has been sharply criticised for the purchase of HBOS, which was saddled with billions of pounds in toxic assets that have had to be covered by government money.
In early London stock market trading on Monday, shares in LBG were down 4.83 percent to 63 pence on the FTSE 100 index, which was down 1.18 percent.
The Financial Times meanwhile reported that Andy Hornby, who was forced to step down as the chief executive of HBOS after leading the bank to near-collapse, is set to take up the same role at British pharmacy giant Alliance Boots.