LONDON (AP) — Stockholders have purchased nearly 97 percent of new shares offered under a rights issue, HSBC said yesterday, raising nearly $18 billion (£12 billion) for the London-based bank.

HSBC, which owns the Bank of Bermuda, announced the issue in March, and offered 5.06 billion shares at 254 pence each on a basis of five new shares for 12 existing shares.

Valid acceptances were received for 96.6 percent of the shares, raising $17.7 billion (£11.9 billion) and HSBC said in a statement that it expected the remaining 3.4 percent to complete today.

"This underlines our determination that HSBC should maintain its signature financial strength which has served us so well," group chairman Stephen Green said.

The issue will strengthen its Tier 1 ratio — an important measure of a bank's capital strength — to 9.8 percent. Tier 1 capital is the amount paid to originally purchase the shares of a bank and retained profits minus losses. The capital raised will provide HSBC with a buffer to weather the difficult economic climate — and put it in a stronger position to take advantage of cheap assets for sale.

HSBC announced the rights issue after reporting a 70 percent drop in 2008 profit. It said then that 6,100 jobs would be cut as it shuts down consumer loan businesses in the US. HSBC also said it would cut its dividend and not pay bonuses to top executives.

Net profit in 2008 tumbled to $5.7 billion from $19.1 billion a year earlier as the company wrote down the value of assets, particularly in the US.

The Bank of Bermuda itself has not needed to raise any new capital.