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The bank is looking into launching a rights issue that would be the largest on record, having started to question investors on the matter yesterday.
However, the value of the new shares is unclear, with Reuters reporting that the total would be worth £12 billion but the Financial Times suggesting the amount could be closer to £13 billion.
Shares in Lloyds Banking Group climbed on the stock market following the announcement, rising 2.83 per cent to 88.43p at 13:01 GMT.
The financial institution is 43 per cent owned by the taxpayer and an anonymous investor told Reuters that the bank would have to offer a discount of "at least 40 per cent" on the new shares.
"It would have to be a big discount for such a huge amount of capital," the person stated, noting that 40 per cent of the current share price would be a "reasonable" amount.
The news source added that Lloyds is aiming to have the process completed by Christmas.
