Steven Crawshaw, the chief executive of Bradford & Bingley, apologised yesterday to any misled shareholders as he announced a £300 million rights issue only weeks after ruling one out.

Disappointed shareholders contrasted the capital-raising decision with B&B’s reassuring statement on April 14 that its capital base was strong and that it had no intention of tapping shareholders.

That boosted confidence then, sending the shares as high as 180p. They plunged 9 per cent yesterday to 144p as the bank executed an abrupt U-turn, announcing that it needed to shore up its balance sheet and offset the damage from its souring treasury assets.

Mr Crawshaw said that the change of heart was because investors now expected stronger capital ratios than they had even a month ago and he insisted that the April 14 statement allowed for a speedy change of mind.

“I’m sorry if that statement was too firm, if that’s the way you look at it,” Mr Crawshaw told The Times. He said that the final sentence in the denial statement, in which B&B said that it was closely monitoring its balance sheet strength, gave it enough leeway for an about-turn.

“This wasn’t a door that was bolted shut,” he said.

However, analysts said that the timing was unfortunate, at best. Bruce Packard, of Pali International, said: “This seems a complete U-turn from a month ago, when B&B played down press speculation that they would do a rights issue. It has been suggested to us that the B&B CEO is out of his depth, and we wouldn’t disagree.”

Nick Raynor, investment adviser for The Share Centre, said: “The rights issue is likely to come as a big surprise to investors, given the company only recently denied that it was planning to raise extra cash from shareholders.”

Investors who bought B&B shares after that denial, which was approved by the bank’s board, were left nursing losses of up to 21 per cent yesterday.

The Financial Services Authority is understood to have ruled out an investigation on the ground that companies have to be allowed to change their minds when circumstances change.

B&B also revealed plans to slash the dividend, cutting the interim payment this year by 37 per cent to 4.2p and paying it in shares rather than cash. It also plans to pay out a smaller proportion of profits in future. Analysts said that the total payment could be down by as much as 80 per cent.

In its rights issue, B&B is offering existing shareholders 16 new shares at 82p for every 25 they own. The issue is underwritten by Citigroup and UBS. For most of the 970,000 small shareholders, who own a package of 250 shares as a result of demutualisation eight years ago, that means paying £131.20 for 160 new shares. Those declining will have their nil-paid rights sold and will receive the proceeds.

The issue price is at a 48 per cent discount to the closing price of B&B on Tuesday, the largest discount of any of the banks to have tapped its shareholders recently.

Mr Crawshaw said that those capital raisings had made bank shareholders more insistent on strong capital ratios from other banks. The extra capital will boost B&B’s core Tier 1 ratio to 9.2 per cent, making it one of the most robust of the high street banks.

Shareholders in Royal Bank of Scotland, who last night it emerged are being sounded out over their level of support for the bank’s executive team, yesterday approved its planned £12 billion rights issue.

The bank said that 95 per cent had voted for the issue and 96 per cent for an interim scrip dividend.

In further bad news from the banks, Lloyds TSB said it was to shed up to 445 IT staff after outsourcing some software development to India.

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