Britain's state-controlled Lloyds Banking Group said on Monday that buyers snapped up all of its heavily discounted new shares to raise 4.0 billion pounds (4.6 billion euros, 6.3 billion dollars).
Lloyds Banking Group (LBG) said in a statement that investors agreed to buy all of the recently-issued new shares. The bank had earlier reported an 87-percent take-up.
LBG had launched the rights issue last month to repay part of its bailout by the British government, which owns about 43 percent of the group.
The successful outcome means that the British government, which had underwritten the rights issue, will not add to its stake.
"Due to the take up... HM Treasury's holding in Lloyds Banking Group remains unchanged at approximately 43.4 percent of the enlarged issued ordinary share capital of the company," LBG added.
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," Myners added.
"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."
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 late afternoon London stock market trading on Monday, LBG shares sank 9.21 percent to 60.10 pence on the FTSE 100 index, which was down 1.01 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.