It said that, under full Basel III capital rules the placing would increase its common equity Tier 1 capital by about 670 million pounds ($1.1 billion), or 24 basis points.
Lloyds said it will sell 109 million shares to institutional shareholders. The stake is worth around 700 million pounds.
($1 = 0.6103 British pounds)
Reporting by Matt Scuffham; Editing by Steve Slater