The twin rights issues will raise £17bn in capital for the combined Lloyds-HBOS bank, buffering it against potential further losses on risky credit-related assets, as well as an anticipated rise in bad debts this year as the UK succumbs to recession. The merger between Lloyds and HBOS, brokered by the government in September last year as a dramatic slump in HBOS' share price threatened to undermine consumer confidence in the bank, is expected to complete on January 19. The tie-up, which would under normal circumstances have been blocked by UK competition regulators, will create a dominant retail financial services group holding a third of all UK current accounts and 28 per cent of the country's mortgages. The UK state already holds a 58 per cent stake in Royal Bank of Scotland after its shareholders largely avoided a similar rights issue in November.